Analysts of Triarc like the acquisition (and why wouldn't they?).
biz.yahoo.com
Tuesday June 24 2:54 PM EDT
Triarc move seen solidifying position - analysts
By Mark Lewis
NEW YORK (Reuter) - Triarc Cos. Inc., the owner of Snapple and Royal Crown soft drinks, agreed to buy the maker of Stewart's root beer for about $30 million in stock, the companies said Tuesday.
Triarc, which recently scrapped plans to sell a stake in its beverage and restaurant operations after buying Snapple, said it agreed to buy root beer maker Cable Car Beverage Corp. by issuing about 1.5 million shares of stock.
``This helps them solidify their role as the non-traditional beverage leader,'' Salomon Bros. analyst Jennifer Solomon said of the Cable Car deal. ``It sounds like a really good niche acquisition.''
Triarc in May bought Snapple for $300 million from Quaker Oats Co., which had been looking to sell the troubled brand. It also canceled plans to sell 20 percent of its beverage and restaurant operations at the time.
Triarc, based in New York, also makes Mistic, Nehi and Diet Rite soft drinks and franchises Arby's fast food restaurants. It had sales of $989 million last year. Cable Car, based in Denver, makes Stewart's root beer and other drinks and had 1996 sales of about $19 million.
Lehman Bros. analyst Michael Branca said Triarc can benefit from acquiring small brands like Stewart's that fit into the alternative beverage category.
``Triarc management has a reputation for very savvy investments,'' he said.
Under the deal, Triarc agreed to exchange 0.1722 of a share for each Cable Car share. Triarc said it expects to issue about 1.5 million shares, which values the deal at about $30.5 million based on Tuesday's prices.
Triarc stock fell 59 cents to $20.25 at mid-afternoon on the New York Stock Exchange. Cable Car shares lost 62.5 cents to $3.41 on Nasdaq.
Triarc said it made an agreement with Cable Car's two largest stockholders, who hold about 20 percent of the stock, to vote their stakes in favor of the deal and not to sell their stock to any other party.
The acquisition is subject to approval by regulators and Cable Car shareholders. It is scheduled to close in the third quarter, Triarc said.
|
