Chiquita, Fyffes Try to Woo Shareholders With Better Deal

(The Charlotte Observer/MCT) -

Chiquita Brands International and Irish produce company Fyffes have sweetened the terms of their proposed merger for Chiquita shareholders, in an attempt to win support for the embattled deal.

Under their revised agreement, the companies said Friday that Chiquita shareholders will get almost 60 percent of the stock in the combined company, ChiquitaFyffes. That’s up from just over 50 percent in the previous agreement.

“We are pleased with the increased value that these enhanced terms for Chiquita bring our shareholders,” Chiquita CEO Ed Lonergan said in a statement. The combined company would still be headquartered in Ireland.

Chiquita, now based in Charlotte, N.C., is under pressure from two Brazilian companies, orange-juice maker Cutrale and banking conglomerate the Safra Group, who are trying to buy the company themselves for $611 million in cash. They’re soliciting shareholders to vote against the ChiquitaFyffes deal.

The Brazilian firms called the revised agreement “a game plan of trying to hoodwink Chiquita investors.” They said their offer still gives Chiquita shareholders more value.

Cutrale and Safra are negotiating with Chiquita about a possible new offer, but have not yet made one. They blasted Chiquita and Fyffes for revising their offer without notifying Cutrale-Safra beforehand, and before the companies submitted their own revised offer.

“The board’s action plan … will do nothing more than cost the Chiquita shareholders money,” the companies said in a statement.

The ChiquitaFyffes deal, first announced in March, would create the largest banana company, leapfrogging competitor Dole.

“The world has changed since March,” David McCann, Fyffes’s executive chairman, told The Wall Street Journal. He was discussing the rival bid from Cutrale-Safra. “We wanted to understand what was needed to get the deal done.”

Chiquita shareholders had been scheduled to vote on the Fyffes deal on Oct. 3. Now, that vote has been pushed back to Oct. 24, to give shareholders time to consider the new offer, Chiquita said.

There are other changes to the proposed all-stock combination. If Chiquita can’t win shareholder support on Oct. 24, Fyffes is entitled to walk away. And if Chiquita enters into any other deals within nine months after that, the company will likely have to pay Fyffes a breakup fee.

That breakup fee has increased, as well, from 1 percent to 3.5 percent of Chiquita’s total value of issued share capital.

Although the headquarters would move to Dublin, company executives have said that most of the 320 workers Chiquita employs at its Charlotte headquarters would stay.

Chiquita was lured to Charlotte in 2011 with about $22 million worth of state and local incentives tied to the company’s job creation.