Chiquita Brands International will begin negotiations to be acquired by Cutrale Group and Safra Group after its shareholders rejected a proposed purchase of fellow banana producer Fyffes.
Shareholders of Charlotte, North Carolina-based Chiquita didn’t back its bid for Fyffes at a special meeting today, according to a company statement, clearing the way for discussions on Cutrale-Safra’s sweetened $14.50-a-share offer. Which was reported earlier today in FreshPlaza.
“Given today’s results, we have determined to terminate the agreement with Fyffes and to engage with Cutrale-Safra regarding its revised offer,” Chiquita Chief Executive Officer Edward F. Lonergan said in a statement. Details of the vote weren’t disclosed.
Fyffes Payment
The current Cutrale-Safra offer is worth $685.9 million, or $1.27 billion including the assumption of Chiquita’s debt, according to data compiled by Bloomberg. Cutrale controls more than one-third of the $5 billion orange-juice market and has global operations in apples, peaches, lemons and soybeans.
Chiquita, which traces its roots to an 1870 shipment of Jamaican bananas to Jersey City, New Jersey, rose 3.6 percent to $14.25 at 11:39 a.m. in New York. Fyffes fell 5 percent to 94 euro cents at 4:15 p.m. in Dublin.
If Chiquita agrees to another transaction within 9 months, Fyffes said it’s entitled to a termination fee equal to 3.5 percent of the value of Chiquita shares.
The payment would amount to about 6.5 percent of Fyffes’ current market capitalization, Holohan said today by phone today.
The Chiquita-Fyffes combination would have created the world’s largest banana company. It also would have allowed Chiquita to relocate its headquarters to Ireland, which has a lower corporate tax rate.
Source: Bloomberg