LONDON (Alliance News) - Chiquita Brands International Inc on Friday said its shareholders have rejected its proposed merger with Fyffes PLC, with the company saying it will enter into talks with Brazil's Cutrale Group and Safra Group on their USD14.50 per share bid for the company.
Earlier in the day, Chiquita's board had said it was still recommending its shareholders vote in favour of the Fyffes merger.
Chiquita Chairwoman Kerrii Anderson and Chief Executive Officer Ed Lonergan, in a statement issued ahead of the vote, said the board "continues to believe in the long-term value of the ChiquitaFyffes merger", adding it does not believe that the USD14.50 per share bid by Cutrale-Safra "is superior to the potential combination".
Irish-based Ffyes issued a statement Friday saying it is still confident it will remain at the "forefront of the global produce industry".
"We will continue to focus on successfully developing our business for the benefit of all stakeholders. We extend our gratitude to Ed Lonergan and the Chiquita team for their professionalism during the process and wish them well in the future. We would like to thank all our team and advisors who have worked tirelessly and diligently on this transaction," said Executive Chairman David McCann in a statement.
Fyffes said that as part of the revised merger agreement on September 26, it is entitled to a termination fee from Chiquita should Chiquita enter into an agreement with someone else within nine months. Fyffes said the fee is worth 3.5% of the total closing value of the issued share capital of Chiquita the day prior to such an agreement.
A Fyffes spokesperson told Alliance News that the 3.5% amounts to around USD20 million.
"Fyffes remains the leading European banana company with turnover in excess of EUR1 billion and a long and successful history of growth. Fyffes management team has a proven superior track record of delivering shareholder value, as demonstrated by our consistently strong results in recent years and solid balance sheet," the company said.
Following the vote by Chiquita shareholders, Chiquita's Lonergan said that, given the result of the vote, "we have determined to terminate the agreement with Fyffes and to engage with Cutrale-Safra regarding its revised offer."
Cutrale-Safra upped its offer for Chiquita on Thursday, having seen its previously increased USD14.00 per share bid rejected by Chiquita a week earlier.
Fyffes shares were trading 9.1% lower Friday afternoon at EUR0.90 cents.
By Sam Unsted and Rowena Harris-Doughty; samunsted@alliancenews.com; @SamUAtAlliance; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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