Chiquita Brands gets buyout offer from Safra and Cutrale
August 13, 2014, 12:02 am TWN
NEW YORK -- Chiquita Brands has received a buyout offer worth about US$611 million from investment firm Safra Group and the Brazilian agribusiness and juice company Cutrale Group.
Safra and Cutrale are offering US$13 per share, a 29-percent premium to Chiquita Brands International Inc.'s closing price of US$10.06 on Friday. Chiquita said its board would review it and asked shareholders to await its recommendation.
The unsolicited bid disclosed Monday comes as Chiquita and Fyffes of Ireland were working on their own transaction. The two companies agreed in March to merge in a stock-for-stock deal to create the world's biggest banana supplier. If a transaction were to occur between Chiquita and Fyffes, Chiquita's headquarters would move from Charlotte, North Carolina, to Dublin, a more tax-efficient corporate base.
In a letter sent to Chiquita President and CEO Edward Lonergan and Chairwoman Kerrii Anderson, Safra and Cutrale said that they believe their proposed transaction doesn't have the same execution risk and uncertainty that a deal with Fyffes does. The companies also said that they think their offer gives more value to Chiquita shareholders and could be completed before year's end.
Safra and Cutrale said that they would like to hear back from Chiquita on their offer by noon on Friday.
In a statement, Chiquita Brands said its board would "carefully review and consider the offer to determine the course of action that it believes is in the best interest of the company and its shareholders."
It advised shareholders to take no action for now and await the board's recommendation.
But it also noted that "we continue to strongly believe in the strategic merits and value provided by the proposed deal with Fyffes PLC."
Representatives from Fyffes did not immediately respond to emails seeking comment.
Gaining access to Chiquita would add more diversity to Cutrale's business. The company is an orange juice processor that also has operations that include apples, peaches, lemons and soybeans. Safra runs banks and invests in other businesses in North and South America, Europe, the Middle East and Asia.
In addition to being a major banana distributor, Chiquita Brands markets and distributes pineapples, packaged salads and other fresh produce.
Shares of Chiquita surged US$3.13, or 31.1 percent, to US$13.19 in Monday afternoon trading — above the offered price.