Pepsi Bottling says PepsiCo. offer flat

Pepsi Bottling has rejected Pepsi Co.'s $6 billion offer for it and its main bottling competitor as "grossly inadequate". Given the two-headed nature of this beast, don't be surprised to hear the same story from PepsiAmericas. On a price-to-earnings...

Pepsi Bottling has rejected Pepsi Co.'s $6 billion offer for it and its main bottling competitor as "grossly inadequate". Given the two-headed nature of this beast, don't be surprised to hear the same story from PepsiAmericas.

On a price-to-earnings basis, the offer values Pepsi Bottling at a six per cent discount to PepsiCo., and PepsiAmericas at a nine per cent discount, according to JP Morgan analysts, and the 17 per cent premium offered to both was greeted with little enthusiasm, particularly once the bottlers, and PepsiCo., beat forecasts with their first-quarter earnings.

As Jessica Hall has reported, an unusual condition requiring both bottlers to agree may actually encourage the two to fight independently for the best price.

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