PepsiCo files suit against bottler
May 11, 2009
by FoodBusinessNews.net Staff
PURCHASE, N.Y. — PepsiCo has filed a suit in Delaware against the Pepsi Bottling Group and some of its directors. The suit alleges P.B.G. intentionally failed to provide notice of a recent board meeting to the P.B.G. directors affiliated with PepsiCo.
At the meeting, the directors reportedly developed a shareholder rights plan (also known as a poison pill), implemented new executive compensation arrangements and amended the bylaws in ways PepsiCo believes are detrimental to its rights as a shareholder. The primary purpose of the meeting in question was to decide on PepsiCo’s proposal to acquire all outstanding shares of common stock not already owned. The bottler rejected the acquisition of proposal calling it "grossly inadequate." PepsiCo made a similar offer to PepsiAmericas, and that bottler also rejected the offer.
"Because of the lack of notice and consideration by the full board, PepsiCo alleges those actions by the board at the meeting are invalid," the company said in a statement. "PepsiCo further alleges P.B.G. and its board breached their fiduciary duties to P.B.G. shareholders by adopting the poison pill because it restricts PepsiCo’s rights as a P.B.G. shareholder and constitutes an unreasonable and disproportionate response to PepsiCo’s constructive proposal."