Pepsi bottler rejects acquisition proposal
May 04, 2009
by FoodBusinessNews.net Staff
SOMERS, N.Y. — The board of directors for The Pepsi Bottling Group, Inc. has rejected a "grossly inadequate" proposal from PepsiCo, Inc. to acquire all outstanding shares of common stock PepsiCo doesn’t already own.
The offer was for $29.50 per share for P.B.G., which represents $14.75 in cash plus 0.283 shares of PepsiCo common stock for each outstanding share.
In a letter to Indra Nooyi, chairman and chief executive officer of PepsiCo, the P.B.G. board of directors said the proposal "substantially undervalues" the company for various reasons, including opportunistic timing as it was made shortly before the release of P.B.G.’s strong first-quarter results. In addition, P.B.G. said the proposal represents inadequate value for the company and understated synergies, saying the proposal understates the synergies available through the combination proposed.
"P.B.G. values its longstanding relationship with PepsiCo, but the P.B.G. board will not agree to a proposal that does not reflect the true value of P.B.G.," the company said. "Accordingly, based on the special committee’s unanimous recommendation, the board has taken customary steps to protect P.B.G. and its stockholders from opportunistic acquisition attempts."