PepsiCo takes Pepsi Bottling to court over board meeting, poison pill

By Lisa Kerner

Charlotte, N.C., May 11 - PepsiCo, Inc. filed suite in Delaware against the Pepsi Bottling Group, Inc. and some of its directors alleging the defendants intentionally failed to provide notice of a recent Pepsi Bottling board meeting to its directors affiliated with PepsiCo.

A copy of the lawsuit was included in a form 8-K filed with the Securities and Exchange Commission.

According to PepsiCo, at the Pepsi Bottling board meeting directors claimed to have adopted a poison pill, implemented new executive compensation arrangements and "purported to amend the Pepsi Bottling bylaws in ways PepsiCo believes are detrimental to its rights as a shareholder."

PepsiCo is seeking declaratory and injunctive relief in the belief that the poison pill restricts PepsiCo's rights as a shareholder.

The poison pill also "constitutes an unreasonable and disproportionate response to PepsiCo's constructive proposal" to acquire Pepsi Bottling, the filing said.

Pepsi Bottling rejected PepsiCo's May 4 offer to acquire the company for $14.75 in cash plus 0.283 shares of PepsiCo common stock, for a total value of $29.50 per share.

Also as part of its bid to consolidate, PepsiCo offered to acquire PepsiAmericas, Inc. for $11.64 in cash plus 0.223 shares of PepsiCo common stock, or $23.27 per share.

PepsiCo, a Purchase, N.Y., food and beverage company, reiterated its belief that the offers are "full and fair" and in the best interests of PepsiAmericas and Pepsi Bottling their respective shareholders.

Minneapolis-based PepsiAmericas is the world's second-largest manufacturer, seller and distributor of PepsiCo beverages.

Pepsi Bottling, based in Somers, N.Y., is the world's largest manufacturer, seller and distributor of Pepsi-Cola beverages.

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