Brazilian Firms: There’s No ‘Pot of Gold’ for Chiquita in Ireland

(The Charlotte Observer/MCT) -

Fyffes, the Irish banana company trying to merge with Charlotte, N.C.-based Chiquita Brands International, told investors that the combination could be worth about 60 percent more per share than a rival buyout offer from two Brazilian companies trying to break up the deal.

But in a sharply worded statement Thursday, the Brazilian companies accused Dublin-based Fyffes of trying to convince Chiquita shareholders to believe there is a “mythical pot of gold at the end of the rainbow.”

The dueling statements are the latest — and harshest — salvo so far in the fight over Chiquita. Orange-juice-maker Cutrale and banking conglomerate Safra Group are trying to buy Chiquita for $13 a share, or about $611 million.

Under the Fyffes deal, the global headquarters would shift to Dublin, but many of the corporate jobs in Charlotte are expected to remain.

Although Chiquita is in talks with the two firms, the banana company would still rather carry out its all-stock combination with Fyffes. Cutrale and Safra forced Chiquita to delay a planned shareholder vote this week on the Fyffes deal, instead pushing it back to Oct. 3.

In a presentation to investors Wednesday, Fyffes argued that the combined company ChiquitaFyffes could be worth $21 a share in 2016, well above Cutrale and Safra’s offer. Chiquita shareholders would own just over 50 percent of ChiquitaFyffes, which Fyffes said would have a market value of $2 billion by 2016.

The share-price estimate is based in part on the combined company achieving $60 million worth of annual savings, largely by combining shipping, logistics, information technology and procurement. Fyffes laid out the choice for investors, as it sees things: Vote for Cutrale and Safra and get $13 a share now, or vote for ChiquitaFyffes and own stock worth $21 a share in two years.

Cutrale and Safra blasted the $21-per-share price as a “speculative future value (Fyffes) has concocted.” The companies said the presentation is “nothing more than a desperate attempt by Fyffes to salvage its proposed transaction with Chiquita,” and said the assumptions Fyffes used to reach its $21 price target are unrealistic and inflated.

“The transactional alchemy underpinning it is just an attempt to convince Chiquita shareholders to believe in the unfounded merits of a Fyffes combination,” the Brazilian companies said.

Cutrale and Safra said they’re still doing due diligence with Chiquita, which has opened its books to the two companies. They will present another offer “as expeditiously as possible,” the companies said. Although Chiquita shareholders are scheduled to vote in Charlotte on Oct. 3, the vote could be pushed back further.