News Column

Chiquita takeover bid has appeal

August 11, 2014

By Kevin McCoy, USA TODAY

Shares of Chiquita Brands International soared Monday after the banana giant got an unsolicited takeover offer that could scuttle its plan to pursue a tax inversion by buying Irish rival Fyffes.

Orange juice supplier and agribusiness firm Cutrale Group and Safra Group, an international group of companies that invests in banks and other businesses, offered to buy all of Chiquita's outstanding shares for $13 each, or nearly $611 million.

The bid, which the Cutrale-Safra team said was not subject to financing, represents a 29% premium to the stock's $10.06 closing price on Friday.

Shares of Charlotte-based Chiquita closed up 30.2% at $13.10.

The proposal came five months after Chiquita said it would combine with Fyffes to become the world's largest banana-distribution company, with a projected $4.6 billion in annual revenue. The deal had been proposed as a corporate inversion that would cut Chiquita's U.S. taxes through a reincorporation overseas. Several U.S. firms have proposed similar transactions this year.

The White House has attacked inversions, with President Obama arguing that U.S. firms using the tactic are "gaming the system." Treasury officials last week said they were exploring ways to block inversions unilaterally.

Cutrale and Safra predicted it might be possible to close their proposed acquisition before the end of the year "without the execution risk and uncertainty" surrounding the inversion plan.

"We are confident that this transaction offers more compelling and more certain value for Chiquita shareholders," the Cutrale-Safra team wrote in a letter to Chiquita Chairwoman Kerrii Anderson and CEO Edward Lonergan.

Chiquita said it would review the offer and "determine the course of action that it believes is in the best interests of the company and its shareholders."

Chiquita accounts for 22% of global banana exports by volume, according to Banana Link, an England-based not-for-profit.

Brazil-based Cutrale said its global operations include orange, apples, peaches, lemons and soybeans. Safra, which has major Brazilian subsidiaries, said it has more than $200 billion of assets under management.

Amy Sancetta, AP

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Source: USA Today

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