Dividend.com: Pepsi Bottling Miffed

Pepsi Bottling Group Rejects Combined $6 Billion PepsiCo Takeover Offer

The Pepsi Bottling Group(PBG Quote) said Monday that it is refusing PepsiCo's(PEP Quote) proposed $6 billion acquisition offer, calling the bid "grossly inadequate."

Pepsi Bottling, which manufactures, distributes and sells PepsiCo's products, said that the $29.50 per share offer made on April 20 does not reflect the company's "true value."

Soft drink giant PepsiCo made a similar offer for its other main bottler, PepsiAmericas(PAS Quote), which has so far not made a decision regarding the bid.

Pepsi Bottling pointed out that its latest earnings report, delivered days after PepsiCo's takeover offer, beat analyst expectations, and the company raised its full-year guidance.

Many believe that the deal will still take place, and that PepsiCo will raise its offer to what the bottling company feels is a more appropriate level.

We have avoided shares of PBG since our early June coverage began, and the stock was trading at $31.46. The company has a dividend yield of 2.29%, based on Friday's closing stock price of $31.41. The stock has technical support in the $22-$24 price area. We believe there is a possibility the stock can make a move to the $34-$35 price level. We would remain on the sidelines for now, but we will look for an opportunity if the shares pull back.

Pepsi Bottling Group is not recommended at this time, holding a Dividend.com DARS Rating of 3.4 out of 5 stars.

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