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Chiquita to Talk With Cutrale-Safra as Fyffes Rejected

By Jack Kaskey 

Oct 24, 2014 8:42 AM PT

Chiquita Brands International Inc. (CQB) will begin negotiations to be acquired by Cutrale Group and Safra Group after its shareholders rejected a proposed purchase of fellow banana producer Fyffes Plc. (FFY)

Chiquita is sitting down with Cutrale-Safra after rebuffing three prior takeover proposals from the Brazilian companies. 

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.

“The likelihood is that Cutrale-Safra will ultimately succeed in acquiring Chiquita,”
said David Holohan, a Dublin-based analyst with Merrion Capital Group Ltd., which owns Fyffes shares on behalf of clients.

Cutrale, a closely held fruit juice company, and banks controlled by Brazil’s second-richest man, Joseph Safra, initially offered $13 a share, or $611 million, to buy Chiquita in August. 

The buyers cited benefits for Chiquita from their farming, processing, logistics and marketing knowledge. 

After the first rejection, they increased the offer to $14 and yesterday raised it by another 50 cents a share, a proposal Chiquita said still wasn’t superior to its plan to combine with Ireland’s Fyffes.

“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

A spokeswoman for the acquirers had no immediate comment. 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.

To contact the reporter on this story: Jack Kaskey in Houston at

To contact the editors responsible for this story: Simon Casey at Tina Davis, Carlos Caminada

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