An investor filed a class action lawsuit on behalf of current investors, who purchased the Pepsi Bottling Group, Inc. (NYSE: PBG) stock prior to the announcement of the proposed takeover by PepsiCo, Inc against Pepsi Bottling Group, Inc and its board of directors over alleged breaches of fiduciary duty arising out of their attempt to sell Pepsi Bottling Group, Inc to PepsiCo, Inc.
Pepsi Bottling Group Inc. was sued by an investor who claims PepsiCo Inc.'s $29.50-a-share buyout offer undervalues the stock. According to court papers the offer is unfair and inadequate because the value of Pepsi Bottling Group's common stock is materially higher than the amount offered, considering its potential profits.

PepsiCo Inc. announced on Monday to buy the bottling operations Pepsi Bottling Group and PepsiAmerica in a $6 billion takeover bid. PepsiCo Inc. is offering $29.50 in cash and stock for each share of Pepsi Bottling Group, Inc (NYSE: PBG), valuing the company at about $6.4 billion and in a separate offer for PepsiAmericas, $23.27 per share, that values that bottler at about $2.9 billion. According to the complaint the plaintiff alleges that Pepsi Bottling Group and its board of directors violated and breaches their fiduciary duty owed to the shareholders of Pepsi Bottling Gorup, Inc. The stocks of both bottlers soared Monday, hitting levels that were above the implied acquisition price. Pepsi Bottling Group shares were recently up 21% to $30.48 and PepsiAmericas shares recently added 21% to $24.08. PepsiCo owned 33.1% of PBG stock as of February 13, according to PBG's proxy filing with the U.S. Securities and Exchange Commission (SEC). Two PepsiCo executives sit on Pepsi Bottling Group 's board,- John C. Compton, head of PepsiCo Americas Foods, and Cynthia M. Trudell, chief personnel officer and a former director of PepsiCo. Pepsi already also owns one-third Pepsi Bottling Group and over two-fifths of Minneapolis-based PepsiAmericas. A decade ago, Pepsi sought to separate itself from its bottlers, figuring it would help the company focus on soft-drink growth while keeping bottling assets off its balance sheet. Pepsi Chairman and Chief Executive Indra Nooyi reportedly said business conditions had changed significantly since then. Owning the two big bottlers would give Pepsi control over how it distributes its beverages, allowing it to revamp production and distribution and squeeze out costs. Combining Pepsi with its two main bottlers would give Pepsi control of about 80% of its North America beverage distribution volume. Late last year Pepsi Bottling began distribution of Crush sodas, made by rival Dr Pepper Snapple Group Inc. and a stronger brand than Pepsi's fruit-soda offerings. Pepsi said its efforts at consolidation would create annual pre-tax synergies of more than $200 million through cost reductions and efficiencies of scale, and expects to boost annual earnings by 15 cents a share once those synergies are fully realized.