The value of Quaker Oats stock surged this week amid rumours Coke, Nestlé and Danone have the cereal and Gatorade sports drink firm at the top of their shopping lists. Earlier in the week, Quaker rejected a $13.7bn paper offer from PepsiCo. But further interest in the company could prompt Pepsi to sweeten its bid, especially if Coca-Cola gets involved. Analysts say the success of Gatorade, which accounts for 40% of Quaker's profits, makes the cereal giant an attractive target in a rapidly consolidating sector. Given Coke let new age beverage firm SoBe slip into PepsiCo's clutches, analysts suspect it is unlikely to let its rival get its hands on Gatorade, which holds 82% of the US sports drink market. "Coke has to look at this," said Sanford Bernstein analyst Bill Pecoriello. "The implications of Pepsi owning both Gatorade and SoBe could be devastating for Coke in the long run." If Coke misses out, there are few big brands in the growing non-carbonated drinks sector left to buy. But getting rid of Quaker's cereal business could prove problematic, say analysts. And Quaker isn't interested in selling Gatorade on its own. Conversely, PepsiCo's Frito-Lay snack food operation would fit nicely with Quaker's food operations. French group Danone and Swiss food giant Nestlé have also been linked with Quaker. Quaker Oats chairman Robert Morrison said that Quaker would continue to go it alone. But he is likely to come under pressure from shareholders to accept any offer. John Sicher, editor of Beverage Digest said: "Any company with a significant presence in non-alcoholic beverages either has taken a look at Gatorade or will be taking a look in the near future." {{NEWS }}

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