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Pepsi Bottling Group rejects PepsiCo acquisition offer
Pepsi Bottling Group Inc has rejected PepsiCo Inc’s $4.2bn acquisition offer, calling it: “grossly inadequate”.
The bottler also looked to further shield itself from any bids that it doesn’t deem favourable, saying it had approved a stockholder rights plan.
The joint $6bn proposal for Pepsi Bottling and PepsiAmericas would have let PepsiCo control about 80% of its total North American beverage volume.
Pepsi Bottling Group stated in a letter sent to PepsiCo chairman and CEO, Indra Nooyi, that it values its relationship with PepsiCo, but wouldn’t agree to a deal that doesn’t reflect its “true value”.
Pepsi Bottling pointed out to PepsiCo that the offer, made on 20 April, came two days before its first-quarter earnings. The bottler’s first-quarter profit more than doubled on a favourable tax audit settlement, which led it to boost its earnings forecast for the year. The results also easily beat Wall Street’s expectations.
Pepsi Bottling said its board’s decision was based on the unanimous recommendation of a special committee made up of independent directors.
PepsiCo currently owns 33% of New York-based Pepsi Bottling Group and 43% of PepsiAmericas, which is based in Minneapolis. Its offers equated to $29.50 per for share for Pepsi Bottling Group and $23.27 per share for PepsiAmericas.
Source: The Associated Press
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