US banana firm Chiquita has rejected a $611m takeover bid and reaffirmed its intention to merge with Irish contemporary Fyffes.
Chiquita has rebuffed Monday’s $13 per share approach from US juice maker Cutrale and Brazilian investment firm Safra.
Chiquita said the offer was “inadequate and not in the best interests of Chiquita shareholders”. The company added that it “has determined not to furnish information to, and have discussions and negotiations with the Cutrale Group and the Safra Group at this time.”
The decision will come as a relief to Fyffes, which saw its share price plunge by over 14% on Monday after news of the bid emerged.
Fyffes’ UK-listed shares were back up 4.75% this morning to 77p, but still some way short of the 88p it was trading at on Monday before the news broke.
The bidders had previously said their offer was “clearly more favourable to the Chiquita shareholders than the proposed merger with Fyffes”.
However, Chiquita has vowed to press ahead with the all-share merger to create the world’s largest banana exporter, which will see Chiquita shareholders take just over 50% of the combined company.
The merger is expected to generate $40m of annual cost savings and will involve a controversial so-called ‘inversion’, whereby Chiquita will shift its HQ to Fyffes’ home jurisdiction of Ireland to benefit from lower tax rates.
Chiquita said it “remains committed to completing its transaction with Fyffes, which it believes will create a combined company that is better positioned to succeed in a highly competitive marketplace, while driving strong performance and value for shareholders”.
Analysts from US investment bank BB&T Capital had previously said they expected Chiquita to reject the bid, but that Chiquita’s position “will become more difficult” if the bidders up their offer from $13 per share.
No comments yet