PEPSICO SALE MAY BREATHE FIRE INTO NEW EPISODE OF COLA WARS.Byline: Glenn Collins The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times By shedding its struggling fast-food restaurants, Pepsi will emerge as a leaner, more focused competitor in its long war with Coca-Cola, industry officials and analysts said, setting the stage for another escalation of the cola wars  An editor has expressed concern that this article or section is .Please help improve the article by adding information and sources on neglected viewpoints, or by summarizing and . Shares of both Pepsico Inc. and Coca-Cola Co. dropped Friday after the announcement Thursday that Pepsico would spin off its fast-food operations as a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. . This falloff fall·off n. A reduction or decrease: a falloff in car sales. Noun 1. falloff - a noticeable deterioration in performance or quality; "the team went into a slump"; "a gradual slack in in beverage shares means that Wall Street ``is saying that the environment in the beverage business is going to get a lot tougher,'' Roy D. Burry burry said of wool when it contains plant burrs, the adherent seed pods, usually of Medicago polymorpha. , a securities analyst for Oppenheimer & Co. said. ``There will be an even greater intensification of the cola wars,'' said John Sicher, publisher of Beverage Digest, an industry newsletter in Old Greenwich Old Greenwich is a neighborhood or section in the southeast corner of Greenwich in Fairfield County, Connecticut, United States. The Old Greenwich Railroad Station serves commuters in the neighborhood. , Conn. ``The spinoff will focus Pepsico even more on the hot competition with Coca-Cola in the emerging markets of Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. and the Far East.'' Although this growing international competition could also bolster the companies' sales and market share, analysts and investors said they were concerned about bottom-line profit erosion due to increased price-cutting and higher expenditures for marketing and advertising. A day after Pepsi shares shot up 11 percent on news of the spinoff, more sober investors ``have realized that the spinoff won't help Pepsico's near-term earnings, even if it's a long-term plus,'' said Anne McDermott of Sovereign Assets Management, a unit of John Hancock Funds that has 880,000 Pepsico shares. Friday, shares of Pepsico closed at $33.875, down $1.625 on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. ; Coca-Cola was down 37.5 cents, at $57.125. Pepsico announced that before the end of the year it would spin off its restaurant unit to stockholders, who would receive shares in the new company. Pepsico will not directly push down any of its current debt to the new company, though the restaurant unit accounts for more than $1 billion of debt on Pepsico's balance sheet. But in an interview Thursday, Roger Enrico, Pepsico's chairman and chief executive, said that Pepsi would expect to receive dividends from a debt offering by the new company. Emanuel Goldman, a securities analyst for Paine Webber Paine Webber and Company was an American stock brokerage firm that was acquired by the Swiss bank UBS AG in 2000. The company was founded in 1880 in Boston, Massachusetts, by William Alfred Paine and Wallace G. Webber. , predicted an earnings-per-share growth rate of 16 to 17 percent for ``New Pepsi,'' the name he has coined for the post-spinoff Pepsico beverage and snack company, with a gesture to the infamous ``New Coke.'' Goldman predicted that New Pepsi, selling at 30 times earnings and 17 percent below Coca-Cola's shares, would have a stock price of $36.30 a share, assuming earnings per share of $1.21. That would be ``slightly more than where Pepsico's stock price is currently, including the restaurants,'' he said. Goldman estimated the combined value of New Pepsi and the fast-food spinoff at $42.55 a share, or 23 percent above Pepsico's current share price. CAPTION(S): Box Box: AT THE COUNTER N.Y Times News Service |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion