PepsiCo (PEP) Updates on Pepesi Bottling (PBG) and PepsiAmericas (PAS) Preliminary Acquisition Considerations

PepsiCo, Inc. (NYSE: PE) announced today the preliminary results of the elections made by The Pepsi Bottling Group, Inc. (NYSE: PBG) and PepsiAmericas, Inc. (NYSE: PAS) stockholders as to the form of merger consideration they wish to receive in the acquisitions of PBG and PAS by PepsiCo. PepsiCo hopes to close the acquisitions, which remain subject to regulatory approvals and the satisfaction of other customary closing conditions, by the end of February 2010.

The merger consideration elections are subject to proration so that, in the aggregate:

• in the case of PBG, 50% of the shares of PBG common stock outstanding not held by PepsiCo or its subsidiaries immediately prior to the closing of the transaction will be converted into the right to receive $36.50 in cash, without interest, per share of PBG common stock, and the remaining 50% of PBG common stock outstanding not held by PepsiCo or its subsidiaries immediately prior to the closing of the transaction will be converted into the right to receive 0.6432 shares of PepsiCo common stock; and
  
  
• in the case of PAS, 50% of the shares of PAS common stock outstanding not held by PepsiCo or its subsidiaries immediately prior to the closing of the transaction will be converted into the right to receive $28.50 in cash, without interest, per share of PAS common stock, and the remaining 50% of PAS common stock outstanding not held by PepsiCo or its subsidiaries immediately prior to the closing of the transaction will be converted into the right to receive 0.5022 shares of PepsiCo common stock.

Shares of PBG common stock, PBG Class B common stock and PAS common stock held by PepsiCo or its subsidiaries will either be cancelled or converted into the right to receive shares of PepsiCo common stock. For a more detailed description of the proration procedures, please refer to the applicable proxy statement/prospectus.

Based on available information, of the approximately 153,023,394 shares of PBG common stock outstanding as of the election deadline of 5:00 p.m. Eastern Standard Time on February 18, 2010 that were not held by PepsiCo or its subsidiaries, cash elections were made with respect to approximately 1,671,436 shares of PBG common stock (1.1% of the outstanding shares of PBG common stock not held by PepsiCo or its subsidiaries). The cash elections with respect to 6,067 of the foregoing shares were made pursuant to the notice of guaranteed delivery procedure, as described below.

Based on available information, of the approximately 70,862,059 shares of PAS common stock outstanding as of the election deadline of 5:00 p.m. Eastern Standard Time on February 18, 2010 that were not held by PepsiCo or its subsidiaries, cash elections were made with respect to approximately 2,304,733 shares of PAS common stock (3.3% of the outstanding shares of PAS common stock not held by PepsiCo or its subsidiaries). The cash elections with respect to 16,103 of the foregoing shares were made pursuant to the notice of guaranteed delivery procedure, as described below.

Cash elections with respect to PBG and PAS shares pursuant to the notice of guaranteed delivery procedure require the delivery of PBG and PAS share certificates representing such shares (or a confirmation evidencing the book-entry transfer of such shares) to the exchange agent, The Bank of New York Mellon, by 5:00 p.m. Eastern Standard Time on February 23, 2010. If the exchange agent does not receive the required certificates or confirmation by this guaranteed delivery deadline, the PBG and PAS shares subject to such election will be treated as shares for which a valid cash election was not made.

Based on the preliminary results above and the terms of the merger agreements:

• PBG stockholders who made valid elections to receive cash consideration will receive cash consideration for 100% of their cash election shares;
  
  
• PAS stockholders who made valid elections to receive cash consideration will receive cash consideration for 100% of their cash election shares;
  
  
• PBG stockholders who did not make valid elections to receive cash consideration will, as a result of proration, receive cash consideration for approximately 49.4% of their shares and shares of PepsiCo common stock for approximately 50.6% of their shares; and
  
  
• PAS stockholders who did not make valid elections to receive cash consideration will, as a result of proration, receive cash consideration for approximately 48.3% of their shares and shares of PepsiCo common stock for approximately 51.7% of their shares.

The final results of the elections are expected to be announced on or about the third business day following the closing of the acquisitions. Pursuant to the merger agreements between PepsiCo and PBG and PAS, fractional shares of PepsiCo common stock will not be issued. In lieu thereof, PBG and PAS stockholders will receive cash for their fractional share interests based on the closing prices of PepsiCo common stock on the last trading day prior to the closing of the transactions.

You May Also Be Interested In

• BofA (BAC), Barclays (BCS) to Sell Remaining Archstone Interest in $1.58B Deal to Lehman Bros.
• Syngenta (SYT) settles atrazine litigation; will pay $105M in deal
• UPDATE: Angelo, Gordon to Acquire Benihana (BNHN) for $16.30/Share in Cash

Create E-mail Alert Related Categories

Corporate News, Mergers and Acquisitions

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?

Follow StreetInsider.com On Twitter