Giant Eagle’s purchase of LeNature plant revoked
PITTSBURGH A bankruptcy court judge on Thursday revoked the Giant Eagle purchase of a LeNature’s plant in Latrobe for $20 million, ruling the grocer intimidated rival bidder Cadbury Schweppes, the Pittsburgh Business Times reported today.
Accordingly, Cadbury was awarded the LeNature’s plant for its second-highest bid of $19 million. Cadbury, however, plans to sell the plant, possibly back to Giant Eagle.
LeNature’s bankruptcy trustee asked that Giant Eagle’s bid be revoked following allegations that the retailer threatened to pull its business from Cadbury prior to the bidding process.
Giant Eagle might lose LeNature plant to Cadbury
PITTSBURGH Giant Eagle may lose its $20 million purchase of bankrupt LeNature’s bottling plant here, according to court documents filed in western Pennsylvania’s bankruptcy court Wednesday.
Court-appointed LeNature trustee Todd Neilson charged that Giant Eagle “acted in bad faith” by intimidating a competing bidder, according to court documents. Specifically, Neilson claimed that Giant Eagle threatened to pull its business from competing bidder Cadbury Schweppes Beverage Group.
Neilson asked Judge Bruce McCullough to approve the sale of the bottling plant to Cadbury Schweppes for $19 million without conducting another auction. Cadbury Schweppes bid was the second highest compared to Giant Eagle’s bid of $20 million for the bottling plant.
A hearing is scheduled for Thursday.
The Pittsburgh Tribune-Review Thursday morning reported that Giant Eagle claims it acted appropriately at all times, and “the complained-of conduct had absolutely no impact on the bankruptcy auction or the sale price.”
By discontinuing the sale of Cadbury Schweppes’ beverages, Giant Eagle estimated that it cut as much as $8 million of sales to Cadbury, according to its court filing. Cadbury Schweppes currently generates some $40 million in beverage sales at Giant Eagle.
Coca-Cola turns to drinks with health benefits
ATLANTA After two years of shrinking U.S. soft drink sales, Neville Isdell, Coca-Cola’s current chief executive officer, is turning to the lab to restore growth with the development of new beverages featuring proven health benefits.
Taking a cue from drugmakers, Coca-Cola is running clinical trials to prove the health benefits of such drinks as Minute Maid Heart Wise orange juice and Enviga green tea. The beverages have the potential to be twice as profitable as soda, which still accounts for 80 percent of the company’s sales.
Some have been critical of the science behind the new drinks, including Enviga, which increases metabolism. According to the company, three cans of Enviga can burn 100 calories, as was determined in a clinical study run by the University of Lausanne in Switzerland. Coca-Cola has dismissed criticism, saying Enviga helps consumers “achieve a healthy lifestyle,” according to Rhona Applebaum, Coke’s chief scientist.
Healthier offerings, overseas expansion and the recent $4.1 billion purchase of Glaceau VitaminWater may help lift the company’s revenue 22 percent by 2010, according to a Bloomberg survey. Coca-Cola’s shares, already up 10 percent in 2007 to date, are forecast to increase 11 percent in the coming year to $59; still down from the stock’s all-time high of $87.94 in 1998.