Filed by Whitman Corporation
Pursuant to Rule 425 under the
Securities Act of 1933 and deemed
filed pursuant to Rule 14a-12 under
the Securities Exchange Act of 1934
Subject Company: PepsiAmericas, Inc.
Commission File No.: 1-13914
On August 21, 2000, Whitman Corporation Issued The Following Press
Release:
NEWS RELEASE
Whitman Corporation
3501 Algonquin Road
Rolling Meadows, IL 60008
(847) 818-5000
FOR IMMEDIATE RELEASE
WHITMAN CORPORATION AND PEPSIAMERICAS
ANNOUNCE MERGER AGREEMENT
CHICAGO (August 21, 2000) - Whitman Corporation and PepsiAmericas, the
second and third largest U.S. based Pepsi Bottlers, today announced plans to
merge later this year.
Under an agreement approved by the companies' boards of directors,
PepsiAmericas will become a wholly-owned subsidiary of Whitman. The merger is
intended to make Whitman a larger, stronger, and more competitive bottler, with
annual sales of approximately $3.0 billion and operations in 18 states as well
as Puerto Rico, Jamaica, Poland, Hungary, Czech Republic, and Republic of
Slovakia.
The companies also announced that upon completion of the transaction
PepsiAmericas Chairman and Chief Executive Officer Robert Pohlad, 46, will
become Chief Executive Officer of Whitman. Pohlad, a highly-respected 24-year
veteran of the bottling business, will succeed Bruce S. Chelberg, 66, who will
fulfill his previously announced plans to retire.
Upon closing of the transaction, Pohlad will be elected to the Board of
Whitman and Archie R. Dykes, 69, Chairman of Capital City Holdings and a
director of Whitman for 15 years, will become non-executive Chairman of the
Board.
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Bruce S. Chelberg, Chairman and Chief Executive Officer of Whitman
Corporation, said, "Our playing field will get bigger with this transaction.
We'll be serving a domestic market of about 45 million people and an
international market, including the Caribbean, of more than 70 million people.
"We believe this is a very positive strategic development for Whitman.
There are potential synergies and opportunities for margin improvement in the
domestic territories, while the Caribbean territories of Puerto Rico and
Jamaica, along with other Caribbean territories, offer some attractive long-term
opportunities for growth.
"In selecting Bob Pohlad to succeed me, the Board has chosen a proven
executive in the bottling industry. I expect Bob to lead Whitman to a new level
of performance."
Robert Pohlad, Chairman and Chief Executive Officer of PepsiAmericas,
said, "I believe this transaction serves the best interests of the shareholders
of both companies. By joining forces, we will be in a better position to
facilitate the acquisition of other domestic Pepsi franchises, improve operating
results through new efficiencies in the core operations, and improve our service
and coordination with large retailers.
"Management has the incentive to succeed. I'm enthusiastic about what
we can accomplish, given the strategies, the resources, and the depth of talent
in Whitman and PepsiAmericas.
"Moving ahead, our focus will be on increasing shareholder value
through profitable growth, improved returns on our investments, and steady
increases in earnings."
PepsiAmericas is the third largest U.S. based anchor bottler in the
Pepsi system, with annual sales of approximately $576 million.
PepsiAmericas produces and distributes Pepsi-Cola and other beverage
products in portions of Arkansas, Iowa, Louisiana, Minnesota, Mississippi, North
Dakota, South Dakota, Tennessee, and Texas. PepsiAmericas also operates in
Puerto Rico and Jamaica and has received certain rights and preferences for
expansion of its business with PepsiCo, including further expansion in the
Caribbean. PepsiAmericas also distributes beer and malt beverages in a limited
portion of its domestic territory.
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Whitman Corporation is the second largest anchor bottler in the Pepsi
system, with annual sales of approximately $2.4 billion.
Through its wholly-owned subsidiary, Pepsi-Cola General Bottlers,
Whitman produces and distributes Pepsi-Cola and other beverage products in 10
states in the central part of the United States.
Whitman also produces and distributes Pepsi-Cola and other beverage
products in Poland, Hungary, Czech Republic, and Republic of Slovakia.
Dakota Holdings LLC, a limited liability company, holds about 70
percent of PepsiAmericas' 87.3 million outstanding common shares. Pohlad
Companies own 66.5 percent of Dakota Holdings and PepsiCo owns 33.5 percent.
PepsiCo also currently holds about 40 percent of Whitman's 136.3 million
outstanding common shares.
Under the terms of the agreement, PepsiAmericas would merge into a
wholly- owned subsidiary of Whitman Corporation. PepsiAmericas shareholders,
other than Dakota Holdings, may elect one of three options as consideration for
their PepsiAmericas common shares:
1. Exchange each of their PepsiAmericas shares for a cash payment of
$3.80 per share, subject to an upward adjustment if the average
closing price of Whitman common stock, during the 15 trading days
ending 5 days prior to the Whitman or PepsiAmericas shareholder
meeting to approve the transaction, whichever occurs first, is
greater than $16.07 per share or a downward adjustment if the price
is less than $13.15 per share.
2. Exchange each of their PepsiAmericas shares, with a value of $3.80
per share, for Whitman common stock, subject to adjustment under the
circumstances described above.
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3. Elect to participate in the earn-out provision of the agreement.
Under the earn-out arrangement, which will be applied to shares held
by Dakota Holdings, PepsiAmericas shareholders who elect to
participate in the earn-out would receive at the closing of the
transaction initial consideration in the form of Whitman shares with
a value of approximately $2.80 per PepsiAmericas share. These
PepsiAmericas shareholders could also receive additional
consideration in the form of Whitman shares, with an approximate
maximum nominal value of $1.50 per PepsiAmericas share, if the
PepsiAmericas territories meet certain EBITDA (earnings before
interest, taxes, depreciation,and amortization) goals through 2002.
Values of the PepsiAmericas shares at closing under the earn-out
provision of the agreement, as well as the value of the shares from
any additional consideration, are subject to adjustment under the
circumstances described above.
In addition, Whitman will assume approximately $330 million of
PepsiAmericas debt.
The transaction is expected to be tax-free to shareholders electing to
receive Whitman common stock or participating in the earn-out.
In connection with the closing of the transaction, PepsiAmericas
shareholders participating in the earn-out will also be able to purchase in the
aggregate 1.7 million shares of Whitman common stock at a per share price of
$14.61, which is equal to the average closing price of Whitman common stock for
the 15-day trading period ending August 18, 2000. Dakota Holdings will have the
right to purchase any of these Whitman shares not purchased by other earn-out
shareholders.
In addition, Pohlad Companies have separately negotiated the right to
purchase up to $25 million of Whitman stock currently held by PepsiCo at the
same price.
Pohlad Companies and PepsiCo have each agreed to enter into agreements
with Whitman to limit the combined ownership of the Pohlad Companies and PepsiCo
to less than 50 percent of all outstanding Whitman shares, except pursuant to
certain provisions in their respective agreements.
The merger agreement between Whitman and PepsiAmericas is subject to
the expiration of the applicable waiting period under the Hart-Scott-Rodino Act,
approval by shareholders of both companies, and customary closing conditions.
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The transaction is expected to be completed by year-end.
Whitman and PepsiAmericas will hold a conference call to discuss the
merger at 1:00 p.m. Eastern Daylight Savings Time, August 21. The call will be
available on the web at http://www.acttel.com/webcastlogin/ (reservation number
751687). You will need Windows Media Player to listen to the call. This will be
broadcast live and archived for 30 days.
This news release shall not constitute an offer of any securities for
sale. Whitman and PepsiAmericas will prepare and file a Joint Proxy
Statement/Prospectus with the SEC. Copies of that document will be provided to
Whitman's shareholders and also to PepsiAmerica's shareholders. In addition,
that document and other relevant documents concerning the transaction will be
filed with the SEC and copies will be available free of charge from the SEC's
website (www.sec.gov) and from Whitman and PepsiAmericas. The Joint Proxy
Statement/Prospectus will contain important information, and stockholders are
urged to read it once it becomes available. All stockholders should read the
Joint Proxy Statement/Prospectus carefully when it becomes available before
making any voting or investment decisions.
This news release contains forward-looking statements. The following
factors, among others, could cause the actual results of the transaction to
differ materially from Whitman's and PepsiAmericas' expectations: the ability to
timely and fully realize expected revenues and cost savings competition; and
changes in economic conditions. Whitman and PepsiAmericas do not assume any duty
to update forward-looking statements. Such statements involve known and unknown
risks, uncertainties and other factors that may cause actual results to differ
materially. Such statements are based on information available as of the date
hereof, and are made only as of the date hereof. To the extent that such
statements relate to the proposed transaction referred to in this release, there
is a risk, among others, that the transaction might not be completed.
Whitman, its executive officers and directors may be deemed to be
participants in the solicitation of proxies from Whitman shareholders and may
also be deemed to be participants in the solicitation of proxies from
PepsiAmericas shareholders, in each case, with respect to the transactions
contemplated by the Merger Agreement. Information regarding Whitman, Whitman's
officers and directors, including beneficial ownership information, is included
in Whitman's Annual Report on Form 10-K for the year ended December 31, 1999
filed with the SEC on March 15, 2000. This document is available free of charge
at the SEC website (www.sec.gov) and from Whitman.
PepsiAmericas, its executive officers and directors may be deemed to be
participants in the solicitation of proxies from Whitman shareholders and may
also be deemed to be participants in the solicitation of proxies from
PepsiAmericas shareholders, in each case, with respect to the transactions
contemplated by the Merger Agreement. Information regarding PepsiAmericas,
PepsiAmericas' officers and directors is included in PepsiAmericas' Annual
Report on Form 10-K for the year ended December 31, 1999 filed with the SEC on
March 15, 2000. This document is available free of charge at the SEC website
(www.sec.gov) and from PepsiAmericas.
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As of the date of this communication, none of the foregoing officers
and participants, individually beneficially owns in excess of one percent of
Whitman common stock or about 70 percent of PepsiAmericas common stock (held by
Pohlad Companies through Dakota Holdings, LLC). Except as disclosed above, to
the knowledge of Whitman and PepsiAmericas, none of the directors or executive
officers of Whitman or PepsiAmericas has any interest, direct or indirect, by
security holdings or otherwise, in Whitman or PepsiAmericas.
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