Cutrale-Safra Sweeten Offer For Chiquita To $14/share In Cash

(RTTNews) - Brazilian companies Cutrale Group and Safra Group said Wednesday that they have raised their offer to acquire banana producer Chiquita Brands International Inc. (CQB) by about 8 percent to $14 per share in cash, as they try to scuttle Chiquita's proposed merger with Irish food company Fyffes Plc FFY.L, FYFFF).

In response, Chiquita said it has received the revised offer from Cutrale-Safra. The company added that it will carefully review and consider the offer in light of the best interests of the company and its shareholders.

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 last 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.

But Cutrale-Safra said Wednesday that having completed due diligence, they have submitted their definitive offer to Chiquita's board of directors, together with a form of merger agreement that the Brazilian companies would be prepared to execute and deliver.

In addition, Cutrale-Safra has delivered to Chiquita equity and debt commitment letters for the transaction, adding that their offer is not subject to any financing conditions.

The Brazilian companies noted that their sweetened offer represents an almost 40 percent premium to the market's valuation of the original proposed transaction with Fyffes, based on Chiquita's undisturbed closing share price of $10.06 as of August 8, 2014.

Cutrale-Safra said, "Our all-cash offer provides certain value to Chiquita shareholders on a timely basis. It constitutes a "Chiquita Superior Proposal" under the terms of the Fyffes Transaction Agreement because it is more favorable to the Chiquita shareholders than the proposed combination with Fyffes, taking into account all financial, regulatory, legal and other aspects of our offer."

Further, Cutrale-Safra said that the financial data provided by Chiquita to the marketplace on Tuesday indicated the difficulty that company will face in meeting its stated 2014 targets, based on historical performance.

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.

The proposed combination has now received all necessary regulatory approvals. The combination remains subject to approval by Fyffes and Chiquita shareholders, respectively, and by the High Court of Ireland.

The special meeting of Chiquita shareholders that was earlier scheduled for October 3, 2014, to consider the combination, is now scheduled for October 24.

CQB is trading at $13.66, up $0.50 or 3.80 percent on a volume of 514,520 shares.