A Melancholy "Do Svidaniya" To Wimm-Bill-Dann

It is always something of a shame when a good company gets bought out and goes away, and even more so when the company is a relatively rare play on a market. Wimm-Bill-Dann (NYSE: WBD) is one of the relatively few Russian companies with liquid ADR shares in the United States, and it's an even scarcer consumer goods company. Now, with Pepsico's (NYSE: PEP) proposed buyout of the company, shareholders get a nice parting gift, but international investors are left a bit poorer for choice. 

Terms Of The Deal
Under the deal announced Thursday, Pepsico will pay $3.8 billion (or $33 per ADR) for a 66% stake in Wimm-Bill-Dann. As a condition of Russian law, Pepsico will then be required to make a buyout offer at the same price to minority shareholders. I frankly admit that I am not an expert in Russian M&A law, so I do not know what happens if the minority shareholders elect to refuse the deal. But I imagine that Pepsico would, at a minimum, cancel the ADR program even if it cannot complete a deal for 100% of the shares. (For more, see ADR Basics: Introduction.)

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