PEP has a first mover advantage and is deep into due diligence. The inclusion of management rollover equity may deter rivals who lack that alignment. The share register is tightly held (retail owns just 13.8%), so any rival would need to convince institutions or insiders to switch sides.
If PEP’s bid lands below expectations (under $3.50?), it could invite a counter offer. KKR or EQT could return, but the odds depend on how PEP plays its hand and how the board responds post-exclusivity. KKR was reportedly the closest to securing a deal earlier this year. That suggests they saw strategic value but may have balked at price or management terms. EQT also kicked the tyres but didn’t progress as far. Now that PEP has surfaced and secured exclusivity, KKR and EQT may be watching closely, especially if PEP’s final bid is seen as opportunistic or if management’s rollover terms raise governance concerns.
Offering scrip consideration to Scott Didier and other executives isn’t just about retaining leadership,it’s also a strategic moat for PEP. It encourages management to support PEP’s proposal, even if rival bidders offer a higher headline price. Competing bidders without rollover options must match the same net benefit with cash alone, making it more expensive to win. Unless other bidders negotiate similar arrangements, which takes time and trust, they’re already behind.
JLG Price at posting:
$3.06 Sentiment: Buy Disclosure: Held
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