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Pepsi Bottling Rejects Pepsi Takeover Bid

The Pepsi bottler called the proposal from PepsiCo 'grossly inadequate'.

Pepsi Bottling


said Monday it has rejected as "grossly inadequate" a proposal by


(PEP) - Get PepsiCo, Inc. Report

to acquire the bottler.

PepsiCo, which currently owns 33% of Pepsi Bottling, in April offered $29.50 a share for the remaining stake that it doesn't already own. It initially spun off Pepsi Bottling in 1999.

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The $6 billion proposal for Pepsi Bottling and



would have let PepsiCo control about 80% of its total North American beverage volume.

Shares of Pepsi Bottling closed Friday at $31.41.

In a letter to PepsiCo, Pepsi Bottling said the value of the proposal is "substantially below PBG's intrinsic value," and is at "virtually no premium to market" given Pepsi Bottling's first-quarter earnings and the company's upward revision to full-year per-share earnings and operating free cash flow guidance.

Pepsi Bottling said it values its relationship with PepsiCo, but its board won't agree to a proposal that doesn't reflect the "true value" of the company.

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