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.”

CIT, the small-business financing company that provides funding for airlines, railways, retailers and manufacturers, should have little trouble securing some kind of government aid, whether in the form of a short-term loan, as seems to be the most likely scenario, or even a TARP or FDIC bailout.

Public antipathy toward bailing out financial companies was pretty much exhausted months ago. Plus, with banks still skittish about lending, CIT serves a clientele that has both ready demand and strong support in conservative corners of Washington that have long touted small business as their base.

The more hearty free marketers say CIT clients will be able to find funds elsewhere if the company does go under. But in the current environment, might a government agency be just as likely to fill that role as the banking sector?

U.S. officials consider giving CIT Group Inc a temporary loan as part of an aid package to help the lender avoid collapse; U.S. asset manager Franklin Resources Inc (BEN.N) drops out of a consortium negotiating to buy American International Group Inc’s (AIG.N) asset management unit; and The New York Times Co agrees to sell its New York City classical music radio station for $45 million, to help pay off debt. For these stories and all the other latest deals news from Reuters, click here.

And here’s what’s in the newspapers and online (some links may require subscriptions):

* Belgium’s Solvay (SOLB.BR) has narrowed the list of bidders for its pharmaceuticals business to Swiss company Nycomed and Abbott Laboratories (ABT.N) of the United States, FT.com reported on its website.

* The board of Australian conglomerate CSR Ltd (CSR.AX) still favours a stock market float of its $955 million-valued sugar business, though four overseas trading houses are eyeing bids if a trade sale goes ahead, Australia’s Age paper reported.

* Two companies controlled by Macau Chief Executive Edmund Ho have sold a combined 1.25 percent stake in financially troubled Air Macau to a unit of China flagship carrier Air China (601111.SS), the South China Morning Post reported, citing sources.

* South Korea’s Samsung Electronics (005930.KS) plans to invest about 500 billion won ($389 million) in the biotech medicine business, a local internet news provider said on Wednesday, quoting a top policymaker.

* Administrators for Lehman Brothers Holdings Inc’s (LEHMQ.PK) main European unit have finalized a plan to return about $13 billion in client funds that have been held up in legal proceedings since the investment bank collapsed last year, the Wall Street Journal said.

* Bank of America Corp (BAC.N) is mounting a campaign to rehire several of the more than three dozen senior Merrill Lynch & Co investment bankers who quit after the firms merged, Bloomberg reported, citing people familiar with the efforts.

* Commodities trading company Glencore International AG has been talking to bankers about selling a small stake in the business to raise $1.5 billion, Wednesday’s edition of the Daily Telegraph newspaper reported.

Turns out Goldman Sachs is a staunch advocate of going organic — when it comes to the money management business.

As Barclays auctioned off its Barclays Global Investors unit this year, Goldman was widely seen as a likely acquirer. That is until Blackrock In under Larry Fink emerged as the buyer with a $13.5 billion deal.

Lots of other money managers are expected to be sold, as the industry consolidates and cash-strapped banks look for valuables to pawn. But Viniar told analysts Goldman’s preference is to grow the business without deals, and appeared to question the very idea of money manager deals.

“If there were an acquisition that made sense financially for us to do, we would certainly consider it,” he said, something he says every three months to calm down excitable analysts. “When we look at the prices of most of the acquisitions, we think that they haven’t made sense in that you’ve had to assume really heroic growth rates that we don’t think are realistic.” 

Jefferies Putnam Lovell recently said it counted 35 management deals in the second quarter, compared with 52 deals a year earlier. Besides the BGI takeover, Aquiline Capital Partners acquired Conning & Co,  JPMorgan Chase bought the remainder of its Highbridge Capital Management hedge fund unit and Woori Finance purchased Credit Suisse’s 30 percent interest in a joint venture.

Yet Viniar notes money management firm deals are tricky, since buyers have to pay a premium for the company and then put up more money to retain star managers. And even as billions of profits come sloshing into Goldman’s coffers, Viniar apparently doesn’t like to part ways with the firm’s cash.

“It has taken a while, but we’ve grown (the asset management business) quite successfully, almost exclusively organically.” he said. “And the high likelihood is that is the way we are going to continue to grow it in the future.”

(Photo: A customer walks past organic products in an organic food chain store in Taipei/Pichi Chuang)

After more than a week of silence, Goldman Sachs finally commented publicly on the alleged theft of computer codes by former programmer Sergey Aleynikov calling losses sustained as a result would be “very, very immaterial.”

Those words were spoken by David Viniar, Goldman’s Chief Financial Officer, in response to a Reuters question during a conference call with reporters to discuss the company’s robust second quarter earnings.

Aleynikov, a former Goldman computer programmer, was arrested on July 3.

“We still have all of the code,” Viniar said. “It is not like the code had been lost to Goldman Sachs. And even if it had been, it is a small piece of our business.”

A federal prosecutor last week during a bail hearing for Aleynikov made it sound as though the code was of vital importance.

“It is something which they had spent millions upon millions of dollars in developing over the past number of years and it’s something which provides them with many millions of dollars of revenue throughout this time,” Joseph Faccipointe said, according to a court transcript.

Viniar said on Tuesday he was limited in what he could say about the story that just last week threatened to overshadow Goldman’s landmark earnings announcement.

“First of all, there’s an ongoing case so I can’t say much,” Viniar said.

(Photo courtesy of Goldmansachs.com)