Because of the lack of notice [image-nocss] and consideration by the full board, PepsiCo has alleged that those actions by the board at the meeting are invalid. PepsiCo further has alleged that PBG and its board breached their fiduciary duties to PBG shareholders by adopting the poison pill because it restricts PepsiCo's rights as a PBG shareholder and constitutes an unreasonable and disproportionate response to PepsiCo's constructive proposal. The suit seeks declaratory and injunctive relief.
On April 19, 2009, PepsiCo made a proposal to acquire all of the outstanding shares of common stock that it does not already own in its two largest anchor bottlers, PBG and PepsiAmericas, at a value of $29.50 per share for PBG and $23.27 per share for PAS. PepsiCo currently owns 33% of the outstanding shares of PBG and 43% of the outstanding shares of PAS.
On May 4, 2009, PBG announced that its board had rejected PepsiCo's proposal. In addition, PBG also announced that its board had approved adoption of a shareholder rights plan, commonly referred to as a "poison pill," as well as retention arrangements for certain key employees and amendments to PBG's bylaws regarding notice and informational requirements for shareholder actions.
PepsiCo has reiterated its belief that its offers are full and fair and in the best interests of PBG, PAS and their respective shareholders.
For more information from PepsiCo about its proposal with respect to PBG and PAS, click here.
Andclick here for previous CSP Daily News coverage.
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