Pepsi Bottling Group has rejected a takeover offer from its parent group, PepsiCo, as "grossly inadequate".

The soft drinks bottler said today (5 May) that it has rejected PepsiCo's bid on the advice of a special committee of independent directors, which it set up to consider the proposal.

PepsiCo, which already owns a 33% share in Pepsi Bottling Group (PBG), last month offered to buy up all outstanding shares in the bottler for US$29.5 per share, representing a 17% premium on PBG's share price at the close of the New York stock market on 17 April.

In a bid to improve supply chain efficiency, PepsiCo has also offered to buy up outstanding shares in its other major bottler, PepsiAmericas. Both deals combined would cost PepsiCo $6bn, it has said.

"The value of your proposal is substantially below PBG's intrinsic value, as well as the value that would be implied by comparable transactions," said PBG chairman and CEO Eric Foss and Special Committee chairperson Ira Hall in a joint letter to PepsiCo CEO and chairperson Indra Nooyi, dated 4 May.

"Your offer is at virtually no premium to market given PBG's first quarter earnings and upward revision to full-year EPS and operating free cash flow guidance," they said.

Calling the offer "grossly inadequate", they added that potential synergies from the deal are likely to be "multiples" of the $200m figure cited by PepsiCo.

"PBG values its longstanding relationship with PepsiCo, but the PBG Board will not agree to a proposal which does not reflect the true value of PBG," Foss and Hall said.