Updated from 1:20 p.m. EDT
announced Thursday that it was planning an initial public offering of its beverage group, which includes such well-known brands as Snapple and Royal Crown.
The new beverage company, to be called
Snapple Beverage Group
, will own both Triarc's premium beverage business, including Mistic and Snapple brands, and its soft drink concentrate business, which includes Diet Rite and other Royal Crown sodas.
Triarc said it plans to file a registration statement with the
Securities and Exchange Commission
within the next few days and complete the new company's public offering during the third quarter of the year. Proceeds from the sale of the Snapple Beverage Group will be used to repay debt.
Ann Gurkin, an analyst at the Virginia-based firm
Davenport & Co.,
said the public offering of the new beverage group is consistent with Triarc's efforts over the past several years to increase shareholder value. "The beverage group is a high-growth area," she added.
Gurkin would not comment on any underwriting relations Davenport might have with the New York-based Triarc. She maintains a buy rating on the stock with a 12-month target price of $30 a share. The analyst also forecasts continued strong growth in the company's premium beverage business, which includes Snapple products.
Shares of Triarc traded down 7/16, or 2%, at 19 3/4 Thursday.
Triarc Beverage Group's
current chief executive, will become the chief executive of the new company. Nelson Peltz, Triarc's chairman and chief executive, will become chairman of the company. Snapple Beverage Group will be headquartered in White Plains, N.Y.
paid a reported $1.7 billion to acquire
in 1994, but shrinking sales of Snapple products prompted Quaker Oats to sell the company to Triarc for the bargain-basement price of $300 million in early 1997.
Snapple has started to turn around under Triarc, steadily increasing its sales volume and introducing several new drink flavors, including a new line of herbally enhanced drinks, over the past few years.
In Triarc's most recent annual report, Peltz said Snapple's successful "rebirth" helped increase Triarc's premium beverage revenues to $651 million in 1999, up 6% from the year before. "Looking ahead, we believe that Snapple will continue to experience volume increases," he added.
Triarc is primarily a holding company that produces and sells beverages and soft drink concentrates, and franchises restaurants, including the 10th largest fast-food chain,
, through its subsidiaries.
Triarc is one of two companies in the beverage industry to announce on Thursday plans to sell off a portion of their business. The London-based food and beverage giant
said Thursday that it planned to
sell part of its Burger King business on the
New York Stock Exchange
, and might eventually sell the entire company.