Fyffes Ups Chiquita's Stake in New Merger Agreement

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Fri. September 26th, 2014 - by Christofer Oberst

CHARLOTTE, N.C. and DUBLIN, IRELAND - A newly revised merger agreement between Chiquita and Fyffes will now give the former a greater stake in the combined company. The proposal states that Chiquita shareholders will own a 59.6% stake in ChiquitaFyffes, up from 50.7% under the previous agreement, while Fyffes shareholders on the other hand will now own approximately 40.4% of the merged business, according to a press release.

The updated deal comes just one week before the upcoming shareholder vote on the proposed merger, set for October 3. Cutrale-Safra, the competing private Brazilian companies bidding for control of Chiquita, are also scheduled to complete due diligence that same day and submit their best offer.

Cutrale-Safra quickly fired back with a statement of their own on the new agreement, accusing Fyffes of trying to “hoodwink Chiquita investors” and calling the combined group “highly flawed and fraught with risks for Chiquita shareholders.” They further claimed that the revised transaction values the merged company at $11.82 a share, “well below the $13 all cash certain Cutrale-Safra proposal,” the statement read.  

According to Wall Street Journal, Cutrale-Safra had originally offered roughly $625 million in cash for Chiquita last month. 

Research analyst Luke Tribe at WH Ireland tells Financial Times that though the revised deal gives Chiquita a greater share of the combined entity, it also gives Fyffes the right to terminate the deal, and with it, a potential termination fee if Chiquita enters into another deal within the next nine months. “I think this encourages both parties to work through the regulatory approval, and for Chiquita to reject another approach from Cutrale-Safra,” he said.

David McCann, Fyffes Executive ChairmanSpeaking on the revised binding agreement, David McCann, Fyffes Executive Chairman, said that it “reinforces our conviction that the Combination is the value-maximizing opportunity for both companies’ shareholders.”

Ed Lonergan, Chiquita CEOChiquita CEO Ed Lonergan agreed, noting, “The Fyffes transaction is a natural strategic partnership that brings together two complementary companies to create a combined company that is better positioned to succeed in a highly competitive marketplace, while driving strong performance and value for shareholders as well as immediate benefits for customers and consumers worldwide.”

With the shareholder vote just days away, it looks as though Cutrale-Safra is committed to submitting a new offer to prevent the Chiquita-Fyffes merger. However, will it be enough to dissuade Chiquita from proceeding with the deal?

As of 2:19 PM EST, Chiquita's stock increased $0.33 to $14.33, up 2.36%. Fyffes' stock increased $3.00 to $86.00, an increase of 3.61%.

Stay tuned to AndNowUKnow for our continuing coverage on Chiquita and Fyffes.