LONDON (Alliance News) - Fyffes PLC and Chiquita Brands International Inc Friday said the two companies have unanimously approved a revised agreement for the proposed merger of the two banana groups, the latest step in a battle for Chiquita with rival bidders the Cutrale Group and the Safra Group.
Under the terms of the new deal, Fyffes shareholders will now get 0.1113 ChiquitaFyffes shares for each Fyffes share they currently hold upon completion of the merger. Chiquita shareholders will receive 1 ChiquitaFyffes share per Chiquita share they hold.
Under those terms, Chiquita shareholders are expected to own 59.6% of the combined business, an increase from the 50.7% they would have owned under the terms of the previous agreement. Fyffes shareholders are now expected to own approximately 40.4% of the ChiquitaFyffes business, on a fully diluted basis.
The pair have also agreed to terminate the fee payable to Fyffes from 1% to 3.5% of the total value of the issued share capital of Chiquita should the proposed merger be cancelled under certain conditions included in the amended agreement.
"The combination of Chiquita and Fyffes is strategic and compelling, creating the number one banana company globally, with synergies that can only be achieved by these companies coming together," said David McCann, Executive Chairman of Fyffes.
"This revised binding agreement, along with the additional synergies recently announced, reinforces our conviction that the Combination is the value-maximising opportunity for both companies' shareholder," McCann added.
The new agreement comes after Fyffes and Chiquita said earlier this month they were working towards obtaining Phase 1 clearance from the European Commission for their merger. Reuters reported earlier this week, citing sources familiar with the matter, that the pair are set to secure a conditional approval for their merger from the EU.
Cutrale and Safra had made a USD625 million rival takeover offer for Chiquita, however, Chiquita rejected this offer saying it was "inadequate and not in the best interests of shareholders." Cutrale and Safra have said they would go direct to Chiquita shareholders to urge them to vote against the proposed Fyffes merger, saying its proposal will give the shareholders greater financial value and more certain value.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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