LONDON (Alliance News) - Chiquita Brands International Inc and the Cutrale-Safra group on Monday said they have reached an agreement on a USD1.3 billion takeover of Chiquita by the two Brazilian food companies, bringing an end their battle with Irish banana company Fyffes PLC to win Chiquita's hand.
Under the terms of the deal, Cutrale-Safra, a joint venture of Brazilian companies Cutrale Group and Safra Group, will buy all outstanding shares in Chiquita for USD14.50 per share. The offer price was increased from USD14.00 per share on Thursday last week after Chiquita's board rejected the lower offer in favour of proceeding with a planned merger with Fyffes on which it was due to vote on Friday. The new deal values Chiquita at around USD1.3 billion, including debt.
Prior to the shareholder vote on Friday, Chiquita Chairwoman Kerrii Anderson and Chief Executive Officer Ed Lonergan 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".
But Chiquita shareholders begged to differ and rejected the Fyffes deal in favour of the increased Cutrale-Safra offer.
The decision followed a continued campaign by Cutrale-Safra to undermine the Chiquita-Fyffes merger agreement, including an attack on the board of Chiquita in which it claimed it was "significantly deceiving and misleading Chiquita shareholders about both the Cutrale-Safra definitive offer and the Fyffes transaction" and claimed that Chiquita's rejection of its USD14.00 per share bid continued its "track record of value destruction".
Chiquita said the USD14.50 per share consideration to be received by its shareholders represents a 34% premium to Chiquita's closing price on March 7, the last trading day prior to the announcement of Chiquita's proposed merger with Fyffes.
The two companies said they expect the deal to close by the end of 2014 or in early 2015. Following completion, Chiquita will become a wholly-owned subsidiary of Cutrale-Safra.
Following the announcement of the shareholder vote on Friday, Fyffes said it remains confident it would stay at the "forefront of the global produce industry". Under the terms of its revised merger agreement with Chiquita, it will receive a termination fee of around USD20 million, the company told Alliance News last week.
The news of the collapse of the merger sent Fyffes shares down nearly 10% on Friday, but they were slightly higher in trade on Monday, up 0.1% to EUR0.94.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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