Strategic Beverages (Thailand), a joint venture between PepsiCo and its Thai partners, yesterday cancelled its tender offer for shares of Serm Suk, the local bottler of Pepsi and related drinks.
Meanwhile, the Bulsook family, a major shareholder in Serm Suk, purchased 32.21 million shares, or 12 per cent of the Thai bottler, from the Osathanugrah family.
The big-lot transaction was handled by Bualuang Securities and Phatra Securities for Bt29 a share.
An investment-banking source said the big-lot transaction would boost the Thai shareholders' bargaining power in the event of a second tender offer from US-based PepsiCo.
Strategic Beverages director Parinya Kitjatanapan said the number of Serm Suk shares that would be sold to the firm was less than the conditional target of 25.14 million shares, so the firm decided to terminate the tender offer.
The offer attracted shareholders to sell 22.7 million shares of Serm Suk to Strategic Beverages, or 8.67 per cent of the outstanding shares. Strategic Beverages' conditional target is 9.46 per cent of the total outstanding shares, so that PepsiCo could have a total shareholding of 51 per cent in Serm Suk.
At present, the parent firm holds 41.54 per cent shares in Serm Suk via Pepsi-Cola (Thai) and Seven-Up Nederland. Those two units are major shareholders of Strategic Beverages.
Serm Suk president and CEO Somchai Bulsook reported to the Stock Exchange of Thailand that the big-lot transaction of 32.21 million shares would have no effect on Serm Suk's management.
In a statement to the Securities and Exchange Commission, Strategic Beverages said market trading in Serm Suk shares above the tender price of Bt29 apiece was the principal reason for the outcome.
A spokesman for PepsiCo, a JV partner in Strategic Beverages, said the result of the tender offer did not affect PepsiCo's long-term commitment in Thailand.
"We know this company well. We have been an investor for many years, and our tender offer was a strong indication of our long-term commitment both to Serm Suk and
to Thailand," the spokesman said.
"We are of course disappointed that we did not achieve our target. Our price of Bt29 represented a near 10-year high for the stock, and we believe it was fair to all shareholders."
Earlier, it was reported the value of Serm Suk shares should have been higher, at Bt39.30 to Bt41.90 apiece.
Serm Suk's Somchai also said his firm could continue its business without PepsiCo.
If Strategic Beverages acquired the 51-per cent shareholding, it would have complete management control of the Thai bottler.