PepsiCo Inc's offers to buy its two bottling affiliates has dragged on and on and could be a distraction for the companies as they begin planning for 2010.
    
Bill Pecoriello, CEO of ConsumerEdge Research, said he believes PepsiCo would only be willing to raise its offer 10 percent and that would be insufficient to entice Pepsi Bottling Group to the negotiating table.
    
Pecoriello said the soda saga has dragged on longer than he expected and there's no catalyst in sight to trigger talks. 
    
"The biggest worry is that it becomes a distraction. You get to the point when you have to start planning for 2010 and everyone is in limbo," Pecoriello said.
    
PepsiCo's strategy could be to let time pass and hope PepsiBottling's shares drift lower -- making the $29.50 per share offer look more enticing. Still, PepsiCo has room to raise its offer and it would be attractive for the soda giant even if it paid in the upper $30-per-share range, Pecoriello said. PepsiCo could afford to pay in the high $20-per-share range for PepsiAmericas.
    
If PepsiCo walked away from the deal, it would have to invest $400 million to improve the performance of its North American beverage business, he said. Rival Coca-Cola is gaining momentum and could pressure PepsiCo.
    
PepsiCo has said its offers were "full and fair."

B&G Foods Inc wants the small, orphan brands that no one else loves. 

"We have a laundry list and any number companies that we talk to on a regular basis," said B&G Chief Executive David Wenner. "We're buying all these things people don't want to run."

B&G pointed to the success of its acquisition of Cream of Wheat, saying "no one was paying any attention to it. So that's where we come in."

"We're looking for things are aren't commodities. Higher margin products, ethnic foods are great. Las Palmas and Ortega -- they've grown steadily over the years and we love that," Wenner said.

B&G aims to stick to its tried-and-true practice of buying dry grocery products that immediately add to earnings or revenues.

B&G wants to carve out orphan products from larger food companies. When it approaches potential sellers, B&G says "We're able to come in and take these five things  you don't want.  We're able to come in and take these things over very very quickly," Wenner said. 

The company targets smaller brands or private companies. "We're not buying Kraft tomorrow." 

Still, some acquisitions may have to wait. Sellers are still looking for premiums that reflect higher stock prices from a year ago, rather than the current depressed prices, Wenner said.

"The brands that may be available are on hold -- I see some more consolidation in the food industry at some point," Wenner said. "But we still have sellers that are looking for double-digit EBITDA (earnings before interest, taxes, depreciation and amortization), and that's not where the world is today."

(Reuters photo)

(Refiles to correct Donahoe’s first name to John.)

To sell Skype, or not to sell Skype. That is the question for eBay, and Wall Street has diverging opinions on whether the San Jose company will or won’t unload its Internet telephone service.
    
Skype was acquired under the reign of former CEO Meg Whitman (now a California gubernatorial hopeful) and touted as a nifty way for eBay’s millions of sellers and buyers to connect. That reality never materialized, and current CEO John Donahoe has acknowledged that synergies between eBay and Skype are nonexistent.
    
Still, Skype is on a tear, growing at double digits and adding 350,000 global users a day. The five-year-old company logged $551 million in revenue in 2008 — that number is expected to double by 2011 — and is now a subject of great speculation by analysts, who wonder whether eBay plans to spin it off, or hold it close. 
                              
Cowan and Co’s Jim Friedland, for one, thinks it’s for sale. Writing in a note the day after eBay held an analyst presentation to outline the company’s three-year plan, Friedland said it appeared “eBay was using the Skype discussion to trigger a bidding war between Google and Microsoft.”
       
“We believe the asset would be attractive to both Google and Microsoft to enhance their web-based enterprise application services. In addition, Skype’s user base of 405 million, which is particularly strong internationally, would likely strengthen Google’s dominant position in the consumer web app market.”

But Bernstein Research’s Jeffrey Lindsay did not see it that way: “We think the dearth of buyers such as Google or Microsoft will mean that eBay is more likely to spin out part of Skype to the public (like Time Warner did initially with Time Warner Cable).”
    
Huh. Donahoe, incidentally, has said only that eBay will do what’s best “to maximize Skype’s potential and value.”
    
Deutsche Bank’s Jeetil Patel opined that, since Skype is performing well, “Management should hold on to this business model” and Credit Suisse’s Spencer Wang said he did not see eBay rushing to sell.
    
“While we think the company would be open to parting with Skype at the right price (currently valued at $1.8 billion on eBay’s balance sheet), a divestiture of Skype does not appear imminent,” Wang wrote.

(Photo: Reuters)

Natural and organic food grocer Whole Foods will sell 13 stores as part of a settlement that ends an antitrust battle with U.S. regulators over its acquisition of rival Wild Oats.

Is your store on the list?  

• 7133 N. Oracle Rd., Tucson, AZ
• 8688 E. Raintree Dr., Scottsdale, AZ
• 2584 Baseline Rd., Boulder, CO        
• 1651 Broadway St., Boulder, CO        
• 3180 New Center Pt., Colorado Springs, CO  
• 5910 S. University Blvd., Littleton, CO
• 9229 N Sheridan Blvd., Westminster, CO
• 340 N. Main St., West Hartford, CT  
• 4301 Main St., Kansas City, MO
• 1090 St. Francis Dr., Santa Fe, NM         
• 7250 W. Lake Mead Blvd., Las Vegas, NV
• 19440 N.W. Cornell Rd., Hillsboro, OR
• 6930 S. Highland Dr., Salt Lake City, UT

(Photo\Mike Blake, Reuters)

At New York’s semi-annual fashion week, Nicholas Kunz, who designs the Nicholas K line with her brother Christopher, gave some tips on how to weather a tough market:

Another designer at Fashion Week, Thuy Diep, who designs the line Thuy, said her company has trimmed their overhead by buying fabrics in New York this year instead of making the trip to Paris. She has also made it a point to make fewer rough drafts of her designs in order to save money. And even smaller details have not been overlooked for cost-cutting potential– Thuy said she is taking the subway instead of cabs, for example.

For more, read Reuters coverage of emerging designers at Fashion Week.

Hedge fund manager William Ackman has come up with a plan to save troubled discount retailer Target: form a trust with the land the Minneapolis-based store chain owns, spin off 20 percent of that into a $5 billion IPO, then use that money to lower Target's debt and in the process maintain its credit rating. Ackman's hedge fund, Pershing Square Capital Management owns 10 percent of Target.

The plan, a revised version of an earlier real estate plan by Ackman, might sound like a good idea on paper. But commercial REITS are down 57 percent so far this year, according to the FTSE NAREIT US Real Estate Index (industrial and office REITs are down even more, 62 percent).

And the IPO market is all but dead. The last IPO to launch goes all the way back to early August, and 87 companies have pulled their IPO plans so far this year . (One IPO is scheduled to price Wednesday night, however.)

Certainly Target shareholders looked unimpressed by Ackman's latest plan, bidding the retailer's stock down 10 percent to a new 5 1/2-year low.

Still, credit Ackman for thinking big. A $5 billion deal would rank as by far the largest among REITs of any kind this decade, according to Thomson Reuters data.

So far the largest REIT IPOs of the decade are Douglas Emmett, which went public in October 2006 with a $1.6 billion stock flotation and is down 45.6 percent over its offer price, and KKR Financial Corp, which launched a $900 million IPO in June 2005 but whose parent KKR Financial Holdings in March agreed to sell it after it failed to live up to expectations.

But if management and other shareholders go along with Ackman's plan, time may be on his side. Launching an IPO takes time and given enough of it, the commercial real estate and IPO markets could rebound. One day.