Chiquita Rejects Sweetened Offer From Cutrale-Safra

(RTTNews) - Banana producer Chiquita Brands International, Inc. (CQB) on Thursday rejected the sweetened $14 per share offer from Brazilian companies Cutrale Group and Safra Group, saying that their sweetened offer is "inadequate and not in the best interests of Chiquita shareholders".

The company said its board of directors has unanimously recommended that at the special meeting scheduled for October 24, its shareholders vote to approve its proposed merger with Irish food company Fyffes Plc (FFY.L, FYFFF).

According to Chiquita, its board of directors noted that implied present value of future share price range of ChiquitaFyffes is $15.46 to $20.01 per share, based on a range of EBITDA growth during 2015 of 5 percent to 15 percent, and an LTM EBITDA multiple range of 7.0x to 8.0x.

Further, Chiquita said that the ChiquitaFyffes transaction maintains the shareholders ability to realize significantly greater value than $14.00 per share, without losing any control premium that shareholders may receive in the future.

In addition, Chiquita noted that Cutrale-Safra has failed to deliver an irrevocable offer that would remain open past October 24, 2014, so the company's shareholders have no assurances that the $14.00 per share offer would remain available should the Fyffes vote fail.

Chiquita said, "Chiquita remains committed to completing its transaction with Fyffes, which it believes will create a combined company that is better positioned to succeed in a highly competitive marketplace, while driving strong performance and value for shareholders."

On Wednesday, Brazilian companies Cutrale Group and Safra Group said that they have raised their offer to acquire Chiquita by about 8 percent to $14 per share in cash, as they try to scuttle Chiquita's proposed merger with Fyffes.

Chiquita, based in Charlotte, North Carolina, is a marketer of nutritious food products - from bananas, blends of convenient green salads, other fruits to healthy snacking products. Chiquita employs about 20,000 people globally and has annual revenues of more than $3 billion.

In March, Chiquita agreed to combine with Fyffes in a stock-for-stock deal that envisages the combined company to relocate to Ireland in order to benefit from lower corporate taxes.

However, that merger deal was delayed after agribusiness company Cutrale and asset manager Safra offered to buy Chiquita for $13 per share in cash in August, which Chiquita initially rejected as inadequate and not in the best interests of Chiquita shareholders.

In late September, Chiquita and Fyffes announced a revised agreement for their proposed combination. Under the revised deal, Chiquita shareholders are expected to own about 59.6 percent of the combined company, an increase from the 50.7 percent stake under the previous agreement. Fyffes shareholders are now expected to own about 40.4 percent of ChiquitaFyffes, on a fully diluted basis.

Chiquita and Fyffes said in early October that they have received clearance from the European Commission for their proposed merger deal. The regulatory clearance marks an important step toward the completion of their combination, which has been unanimously approved by the boards of directors of both companies.

CQB closed Thursday's trading at $13.61, down $0.22 or 1.59 percent on a volume of 415,136 shares.