The Pepsi Bottling Group, Inc.
Ticker Symbol:
NYSE: PBG
Practice:
Securities Fraud & Shareholder Litigation
Phase:
Settlement On April 23, 2009, Chimicles & Tikellis LLP filed a class action complaint on behalf of all holders of Class A Common Stock of PBG (the “Action) and was appointed Co-Lead Counsel. The Action asserted that as a controlling stockholder of PBG, PepsiCo was obligated to offer a buyout price that was entirely fair to PBG’s stockholders and engage in a process that was also entirely fair. The Action further alleged that by launching its takeover bid at an unfair price and structuring its offer in a manner that was unfair to the public stockholders, PepsiCo (and its designees to the PBG Board) breached their fiduciary duties to PBG’s stockholders.
On April 20, 2009, PepsiCo, Inc. (“PepsiCo”) launched an effort to acquire 100% ownership of the Pepsi Bottling Group, Inc. (“PBG” or the “Company”). PepsiCo is already PBG’s controlling stockholder. Under the terms of PepsiCo’s offer, PBG stockholders would receive cash and stock valued at $29.50 per share (the “PBG Offer”). Also, simultaneous with PepsiCo’s announcement of its proposal to acquire all the outstanding shares of PBG, PepsiCo announced its proposal to acquire its second-largest bottler, PepsiAmericas, Inc. in exchange for a mix of cash and stock equivalent to $23.27 per share (the “PAS Offer”). PepsiCo announced that the Offers made for both PBG and PepsiAmericas, Inc. were each conditioned on the successful completion of both transactions (the “Offers”). The Action alleged that that cross-conditionality circumvented the fairness with which PepsiCo was required to act toward PBG. Moreover, the Action alleged that the conditional structure eliminated the PBG Board’s and stockholders’ ability to approve a deal at a fair price unless or until PepsiAmericas also agreed.
After the announcement of the Offers, multiple actions were filed challenging both the PBG Offer and the PAS Offer and a Consolidated Class Action Complaint was filed June 19, 2009. Thereafter, PepsiCo and PBG agreed to a merger for the substantially increased price of $36.50 per share payable in cash and stock. In addition, PepsiCo removed its requirement that the PBG merger be conditioned on the completion of a merger between PepsiCo and PAS. Given the increased price of $36.50, removal of the requirement that the merger be conditioned on the completion of a merger between PepsiCo and PAS, the reduction of the termination fee payable to PepsiCo and material disclosures made to the class at the insistence of class counsel, Plaintiffs agreed to settle the case.
The Court of Chancery has scheduled a hearing on the fairness of the proposed settlement for April 12, 2010.
| Attachment | Size |
|---|---|
| Consolidated Class Action Complaint | 867.94 KB |
| Stipulation of Settlement | 1.48 MB |
| Exhibit A to the Stipulation of Settlement | 49.5 KB |
| Exhibit B to the Stipulation of Settlement | 779.85 KB |
| Exhibit C to the Stipulation of Settlement | 1012.58 KB |
| Exhibit D to the Stipulation of Settlement | 52 KB |
Attorneys to Contact:
Pamela S. Tikellis (PamelaTikellis@chimicles.com)
Robert J. Kriner, Jr. (RobertKriner@chimicles.com)
A. Zachary Naylor (ZacharyNaylor@chimicles.com)
P.O. Box 1035, 222 Delaware Ave, Suite 1100, Wilmington, DE 19801 Phone: 302-656-2500