Less than three years after Chiquita Brands International announced with much fanfare that it would move to Charlotte, N.C., the banana giant’s future is set to be decided Friday as shareholders vote on whether to merge with an Irish produce company.
It’s still unclear whether shareholders will vote for an all-stock merger with Dublin-based Fyffes or break up the deal in favor of a competing all-cash offer from two Brazilian firms.
Chiquita’s five largest shareholders, which together own a third of the company’s shares, declined to say how they will vote or did not respond to requests for comment Wednesday.
Whichever way shareholders vote, the decision could mean the end of Chiquita being headquartered in Charlotte. If the Fyffes deal is approved, the resulting company would be headquartered in Ireland, though executives say most of the roughly 320 people who work in Charlotte would remain.
If shareholders vote down the Fyffes deal, Chiquita will be left with an unsolicited offer from Brazilian orange-juice maker Cutrale and banking conglomerate Safra to buy the company for $14 a share. That’s a premium to Chiquita’s Wednesday closing price of $12.74 a share.
Cutrale and Safra, which have extensive operations in Florida and Brazil, haven’t said what they would do with Chiquita’s Charlotte headquarters.
Chiquita’s board of directors has fought the offer from Cutrale and Safra for months, however, because they say it undervalues the company. The fight has turned into a bitter war of words, with Chiquita and the Brazilian firms accusing each other of trying to get the best of shareholders.
Cutrale and Safra have said Chiquita is “trying to hoodwink” shareholders, and called the company’s efforts to win support for the Irish deal an “attempt to persuade Chiquita shareholders to believe in (a) mythical pot of gold at the end of the rainbow.”
Chiquita CEO Ed Lonergan shot back this week: “Cutrale/Safra appears only interested in acquiring Chiquita for the lowest possible price without adequately compensating Chiquita shareholders.”
Two of the biggest shareholder advisory firms are also divided. Institutional Shareholder Services is telling its clients to vote for the Fyffes deal, while Glass Lewis is telling shareholders to vote the deal down. Big institutional investors rely on such firms for help in deciding which way to vote in mergers and other corporate actions.
One shareholder, Wynnefield Capital, has said it supports the offer from Cutrale and Safra and rejected the Fyffes deal. Wynnefield, which owns 3.5 percent of Chiquita shares, called Chiquita’s attempts to complete the Fyffes deal a “desperate effort.”
The special meeting is set for 9 a.m. at Chiquita’s headquarters. Most shareholders will have already voted by proxy, either online, by phone or through the mail.