PepsiCo halts Danone take-over rumours

PepsiCo has attempted to put a stop to rumors that it was preparing to mount a takeover bid for French foods group Danone by announcing that it will not attempt to acquire the sixth largest foods group in the world as figured by revenues.

Speculation about such a bid has been making the rounds since early this month, raising the value of shares in Danone by 27 percent in the process. On PepsiCo’s announcement that it would not try to buy Danone, the French company’s shares fell by 6.3 percent, or $1.32, to $19.68 on the New York Stock Exchange.

Additionally, shares in PepsiCo fell 15 cents to $54.68 after the announcement.

The rumors had spurred both the chief executive of Danone and French President Jacques Chirac to declare their willingness to defend the company, which makes Dannon Yogurt and bottles Evian Water, against a foreign takeover.

Because it took so long for PepsiCo to deny the rumors, some analysts think that the manufacturer of Pepsi-Cola, Fritos, and Tropicana juices was testing investor and public reaction to such a takeover.

Meanwhile, a French association that represents minority shareholders has filed a complaint charging share price manipulation of Danone’s stock.

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