LONDON (Alliance News) - Banana producer Fyffes PLC Tuesday filed an investor presentation with the US Securities and Exchange Commission that it said corrected "misleading statements" made by rivals Cutrale Group and Safra Group in connection with Fyffes' proposed merger with Chiquita Brands International Inc of the US.
Fyffes and Chiquita are pushing ahead with a proposed merger after Chiquita rejected a USD625 million rival takeover offer from orange juice supplier Cutrale Group and its investment firm partner Safra Group, calling it inadequate and not in the best interests of shareholders.
Cutrale and Safra have said they will 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.
In filings with the SEC, the rival bidders called into question some of the rationale for the Fyffes and Chiquita deal, calling Fyffes inexperienced in integrating acquisitions and saying there was no certainty that the companies could pull off the synergies they have targeted as part of the deal.
In its response filing with the SEC Tuesday, Fyffes said it has a proven track record in growing its business and has successfully integrated more than 50 acquisitions since its initial public offering in 1981.
Fyffes said revenue has grown by 7.3% compound annual growth rate since its demerger in 2006, while earnings before interest, tax, and amortisation has grown by 16.2%, EBIT by 19.8% and earnings per share by 17.4% compound annual growth rate.
It added that it has long-standing relationships with producers and 10,000 hectares of managed production, and has invested USD108.4 million in buying pineapple and melon farms since 2007. It farms 10,000 hectares in central America, of which 3,9000 it owns.
The Irish company also pointed out that it the biggest banana importer in Europe and the biggest melon importer in the US, and its business is far less volatile than Chiquita or others in the industry "as evidenced by the fact that 74% of Fyffes European banana volume is sold through contracted sales".
Fyffes added that there is no certainty that the Cutrale-Safra proposal preserves optionality for Chiquita shareholders.
"Cutrale/Safra have sought to create the false impression that Fyffes shareholders will be unaware of the consequences of the Cutrale/Safra proposal and that Fyffes shareholders will allow themselves to serve as a stalking horse," it said.
"Cutrale/Safra have deliberately ignored the fact that the approval of the combination requires a special majority of Fyffes shareholders and there can be no certainty that a sufficient number of Fyffes shareholders will vote in favour of the combination if Chiquita has adjourned its meeting to negotiate a contrary transaction with Cutrale/Safra," it added.
Fyffes shares were up 1.8% at 83.00 pence Tuesday afternoon.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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