DOW JONES NEWSWIRES
PepsiCo (PEP) filed a lawsuit Monday claiming Pepsi Bottling
Group Inc. (PBG) and some of its directors intentionally failed to
give notice of a recent board meeting to the Pepsi Bottling
directors affiliated with the beverage and snack food giant.
The move comes a week after Pepsi Bottling rejected a nearly
$4.2 billion offer from PepsiCo to buy the remaining two-thirds
stake it doesn't already own of its biggest bottler, saying the bid
"is grossly inadequate."
PepsiCo alleged Monday that the board's actions - including the
adoption of a shareholder rights plan - at the meeting are invalid
because the full board wasn't present. Such shareholder rights
plans, or poison pills, are often put in place to prevent coercive
takeovers.
The suit seeks declaratory and injunctive relief.
Since PepsiCo launched its bids for Pepsi Bottling and No. 2
bottler PepsiAmericas Inc. (PAS) last month, Pepsi Bottling shares
have been trading above the implied $29.50 cash and stock offer
price, trading recently down 22 cents at $31.98.
PepsiAmericas also rejected the bid last week, calling it
inadequate. PepsiCo currently owns 33% of Pepsi Bottling and 43% of
PepsiAmericas.
The bottlers' refusals have been viewed as more of a negotiating
tactic than an outright renunciation of the deal. The companies
have both been widely expected to negotiate for a higher offer. The
deals are still likely to go through, analysts say, but at higher
prices from the original offer.
PepsiCo shares traded recently up 10 cents at $49.85.
-By Lauren Pollock, Dow Jones Newswires; 201-938-5964;
lauren.pollock@dowjones.com