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News > International
Danone ends Quaker talks
November 23, 2000: 10:54 a.m. ET

French food maker's withdrawal could leave field clear for takeover by Pepsi
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LONDON (CNNfn) - French food maker Groupe Danone said Thursday it had ended talks about a possible bid for Quaker Oats Co., just 24 hours after declaring an interest.

"Despite the strategic and operational logic of a possible combination with Quaker Oats, Danone Group has decided that the financial terms of such a possible acquisition would not be in the best interests of its shareholders nor consistent with its stated strategy of creating shareholder value," Danone said in a statement.

Danone had expressed interest in Quaker Wednesday, a day after Coca-Cola Co. (KO: Research, Estimates) said it abandoned a bid to acquire the maker of Rice-A-Roni, Captain Crunch cereal and Gatorade sports drinks. Coke had been reported to be mulling a $14 billion offer.

Purchase, N.Y.-based PepsiCo Inc. (PEP: Research, Estimates), the world's No. 2 soft drink company, was largely viewed Wednesday as the most likely bidder for Quaker Oats.

Pepsi walked away from merger negotiations with Quaker Oats earlier this month, leaving a $13.7 billion stock-swap offer on the table. The negotiations reportedly fell apart after Quaker Oats insisted that any offer incorporate a "collar," or price-protection mechanism, meant to safeguard Quaker shareholders from any sudden downturn in the acquiring company's stock.

Paris-based Danone's stock shot up 7.7 percent to graphic155 Thursday after it said its own talks with Quaker had ended. Its shares tumbled more than 10 percent on Wednesday as investors worried that the company might enter a deal for Quaker (OAT: Research, Estimates) that would dent its earnings.

Analysts had questioned whether Danone (PBN) could afford a takeover of such a size. In a conference call with analysts Wednesday, Danone warned it would pay for any acquisition with shares and that a deal would not boost earnings per share before 2003.

Quaker shares fell $7.44 to $87 and Pepsi lost $1.75 to $44.75 on Wall Street Wednesday. graphic

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.