The Pepsi Bottling Group, Somers, N.Y., rejected PepsiCo's proposal to buy all of the outstanding shares of PBG's common stock that it does not already own, saying its board felt the offer was "grossly inadequate." In a letter to PepsiCo Chairman and Chief Executive Officer Indra Nooyi, PBG said its board acted on the unanimous recommendation of a special committee comprised entirely of independent directors and advised by Morgan Stanley and Cravath, Swaine & Moore.
PBG's letter said the proposed acquisition undervalued the company for a number of reasons, including:
"Opportunistic Timing: Your proposal was made shortly before the public release of PBG's strong first quarter 2009 earnings on April 22. As you know, PBG exceeded Wall Street expectations for the quarter, raised its full-year guidance for earnings per share and operating free cash flow, and provided details of its plans to achieve over $250 million in cost and productivity savings in 2009 on a standalone basis.
"Inadequate Value: The value of your proposal is substantially below PBG's intrinsic value, as well as the value that would be implied by comparable transactions. Your offer is at virtually no premium to market given PBG's first quarter earnings and upward revision to full-year EPS and operating free cash flow guidance. Transaction premiums, especially those including cash consideration, have been very substantial since the market dislocation last September.
"Understated Synergies: We believe you have substantially understated the synergies that would be available through the combination you have proposed. As you know, PBG has thoroughly analyzed the savings and efficiencies that could be achieved through a transformation of the Pepsi system. Based on our analysis, we are confident that readily achievable synergies are multiples of the $200 million you referenced."
Coca-Cola United opens LEED-certified plant in Louisiana
Baton Rouge Coca-Cola Bottling Co. celebrated the grand opening of its new production and distribution facility last week, and was joined by Louisiana Governor Bobby Jindal, Baton Rouge Mayor Kip Holden, Coca-Cola Co. Chairman and Chief Executive Officer Muhtar Kent, and Coca-Cola Bottling Co. United Chairman and Chief Executive Officer Claude Nielsen.
The new facility achieved LEED certification from the U.S. Green Building Council, becoming the first Coca-Cola bottler and the first manufacturing facility in Louisiana to achieve that status.
"We are committed to being a responsible corporate citizen and we designed our new plant with environmental sustainability in mind," said Darian Chustz, Baton Rouge Coca-Cola Bottling Co. president. The new building was constructed with recycled materials whenever possible, incorporates energy conservation initiatives, and has an on-site recycling center for reclaimed plastic, cardboard, aluminum and shrinkwrap.
In addition, the new plant is expected to generate 113 new jobs for the region during the next three years. It will be capable of producing Powerade and Vitaminwater products as well as carbonated soft drinks, and will supply those products to other Coca-Cola bottlers in nearby states.
Yuengling expands to West Virginia
D.G. Yuengling & Son Inc., Pottsville, Pa., is expanding into West Virginia, and its products will be available through American Beer Co., Beverage Distributors, Carenbauer Distributing Co., Eagle Distributing Co., Elkins Distributing Co., J.C. Mensore Distributor, Jefferson Distributing Co., Mingo Bottling Co., Mona Supply Co. Inc., Mountain Eagle Distributing, Northern Eagle, Preston Silver Eagle, Proud Eagle – S. Charleston and Parkersburg, Valley Distributing Co., and Waldorf Distributing Co.
Yuengling initially will introduce its Lager, Light Lager and Black & Tan packaged beer in May, and says it will likely start shipping draft later this summer.
“Yuengling has experienced a good share of the market in neighboring states to its home state of Pennsylvania," said Lou Romano, Yuengling marketing manager. "Coupled with the strong demand of our products, expansion into the state of West Virginia was a natural choice for us. We feel our core company values of family, heritage, quality and tradition are reflected not only in the wholesale network, but in the residents of the state as well."
ABA names new board
The American Beverage Association, Washington, D.C., has added eight new members to its board of directors. Joining the board are Rich Beck, president of North America Functional Beverages at PepsiCo; Brian Charneski, president of L&E Bottling Co. Inc.; Ralph Crowley, president and chief executive officer at Polar Beverages; Selim Chidiac, chief executive officer of Red Bull North America; Edwin C. Rice, chairman and chief executive officer of Ozarks Coca-Cola/Dr Pepper Bottling Co.; and Cliff Ritchie, president and chief executive officer at Carolina Beverage Corp.
Elected to serve a second term are George Kalil, president of Kalil Bottling Co., and Keith Reimer, president and chief executive officer at Pepsi Bottling Ventures LLC.
Members of ABA’s board of directors serve a four-year term and participate in semi-annual meetings that help shape association policy and initiatives. With the election of these eight new members, there are now 25 members on ABA’s board.
Thorpe takes the helm at Duvel, Ommegang
Simon Thorpe has been appointed president and chief executive officer of Duvel Moortgat USA and Brewery Ommegang, Cooperstown, Pa. Thorpe most recently served as president and chief executive officer of InBev USA.
“I have admired both Duvel and Ommegang for many years; in my mind they have the greatest potential for growth and profitability in the U.S. premium and craft categories," he said in a statement. "I applaud the previous work developing the business. I am delighted to be here and look forward to contributing as Duvel and Ommegang build on their well-deserved reputations as brewers of the highest quality beers for America’s fine beer connoisseurs.”
Drank moves into 7-Eleven
Innovative Beverage Group Holdings, Houston, announced 7-Eleven will carry its Drank relaxation drink nationwide.
“As a longtime customer, as far back as my childhood in Rochester, N.Y., I have always viewed 7-Eleven as an iconic brand,” said Peter Bianchi, chief executive officer at Innovative Beverage Group, in a statement. "As such, securing shelf space at 7-Eleven has not only been a top priority for our roll-out strategy but a personal goal of mine."
Smucker name change
Smucker Quality Beverages, Chico, Calif., has changed its name to Smucker Natural Foods Inc. The division includes the R.W. Knudsen, Santa Cruz Organic, Natural Brew and the new ME brands. The new name more accurately represents the current product offerings and the division’s plan to further expand into non-beverage brands, the company says.
JoJo Energy Drinks
JoJo Energy Drinks Specialty Beverage & Supplement Inc., Holbrook, N.Y., introduced JoJo Energy Drinks. The product carries its ingredients in the cap and is mixed just prior to consumption. JoJo Energy Drink is available in Orange Sickle, Black Cherry, Super Berry, Citrus Guava, Passion Fruit Mango and Mojito flavors. See more on JoJo Energy Drinks.
ZredT, Baton Rouge, La., introduced ZT, a line of antioxidant-rich organic ready-to-drink red teas. ZT is available in Unsweetened, Lemon, Vanilla and Ginseng & Honey flavors. ZT contains magnesium and natural fiber, and also carries a low glycemic index, the company says. Read more on ZT.
Serious Madness Black Ale
Mad River Brewing Co., Blue Lake, Calif., released Serious Madness Black Ale, a high-gravity dark-lager. The ale is fermented with Mad River’s ale yeast and is bittered with Magnum hops, while flavor and aromatics are enhanced by Hallertau, Tettnanger and Willamette hops. Find out more about Serious Madness Black Ale.
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