CIRCLE "A"

Because of the highly competitive nature of that industry and Dr Pepper's poor cash position, few companies showed interest in the firm. In late 1983 Forstmann and Little, a New York investment-banking firm, offered twenty-two dollars a share for Dr Pepper. This deal, using primarily borrowed funds, involved buying out existing shareholders, refinancing Dr Pepper's debt, and retaining the company's top management. At about the same time, another suitor entered the picture. Castle and Cooke, a large food producer based in Honolulu, wanted Dr Pepper. With Dr Pepper, Castle and Cooke would be able partially to offset volatile earnings swings caused by fluctuating commodity prices. Unable to obtain sufficient financial information from Dr Pepper, however, Castle and Cooke's investment group withdrew its offer of twenty-four dollars a share. On February 28, 1984, Dr Pepper shareholders accepted the Forstmann and Little offer, and the company went private.

Also known as: Canada Dry, Castle, Circle "A" Corporation

Primary location: Pepper United States