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Chiquita rejects Brazilian buyout offer

Chiquita Brands Offer
Amy Sancetta - AP
FILE - In this Aug. 3, 2005 file photo, Chiquita bananas are on display at a grocery store in Bainbridge, Ohio. Chiquita Brands on Monday, Aug. 11, 2014 received an approximately $611 million buyout offer from investment firm Safra Group and agribusiness and juice company Cutrale Group. (AP Photo/Amy Sancetta, File)

More Information

  • Brazilian firms offer cash in Chiquita deal
  • Stock quote: Chiquita
  • Chiquita’s letter to Safra and Cutrale

    Here is the full text of the letter Chiquita’s board of directors sent to two Brazilian companies on Thursday.

    “Michael Rubinoff

    On behalf of the Cutrale Group and the Safra Group

    Dear Mr. Rubinoff,

    We are writing in response to your letter of August 11, 2014, proposing that, subject to due diligence, negotiation of definitive agreements, and other conditions, the Cutrale Group and the Safra Group would acquire all of the outstanding common stock of Chiquita at a price of $13.00 per share in cash.

    After careful consultation with our legal and financial advisors, our Board of Directors has unanimously concluded that the Cutrale Group and the Safra Group's offer of $13.00 per share is inadequate and not in the best interests of Chiquita shareholders. Having made such a determination, Chiquita has determined not to furnish information to, and have discussions and negotiations with, the Cutrale Group and the Safra Group at this time.

    The Board continues to strongly believe in the strategic merits and value provided by the proposed transaction with Fyffes.

    Sincerely,

    Kerrii B. Anderson

    Chairwoman of the Board of Directors

    Edward F. Lonergan

    President and Chief Executive Officer”

    The response from Cutrale and Safra

    The Cutrale Group and the Safra Group today said that they are extremely disappointed with the decision of Chiquita’s Board to reject the Cutrale-Safra $13 per share all-cash proposal to acquire Chiquita and not to furnish information to or engage in discussions and negotiations with representatives of Cutrale-Safra regarding this proposal. The Board’s decision is a continuation of its track record of shareholder value destruction. Accordingly, the Cutrale Group and the Safra Group are considering all alternatives to provide shareholders with the opportunity to send a clear message to the Chiquita Board that they should enter into discussions regarding the Cutrale-Safra. The Cutrale Group and the Safra Group stated, “Since the announcement of our proposal, the market clearly has recognized that our proposal provides greater and more certain value to Chiquita’s shareholders than the previously reported Chiquita-Fyffes transaction. Chiquita shareholders’ best interests are served by the Chiquita Board engaging in discussions with us. We have also made it clear that, if we are able to have prompt discussions with Chiquita and undertake due diligence, we would fully expect to complete our proposed transaction no slower than the timeframe that the Chiquita Board has announced for the Chiquita-Fyffes transaction.”



Charlotte-based Chiquita Brands International rejected an unsolicited $610 million buyout offer from two Brazilian firms on Thursday, committing instead to completing its pending merger with an Irish produce company.

But Cutrale and Safra Group, the Brazilian companies, indicated late Thursday that they don’t plan to back down, and said they’re considering “all alternatives” to push Chiquita to deal with them.

In a strongly worded statement, Cutrale and Safra said they were “extremely disappointed” and called the Chiquita board of directors’ decision a “continuation of its track record of shareholder value destruction.”

Chiquita’s board voted unanimously to turn down the upset bid of $13 per share from Safra, a Brazilian bank, and Cutrale, an orange juice supplier. The deal would have superseded Chiquita’s deal with Dublin-based Fyffes, first announced in March.

Chiquita said it won’t give Cutrale and Safra any more information to conduct due diligence or negotiate with the companies.

“The unsolicited offer from the Cutrale Group and the Safra Group announced on August 11, 2014, to acquire all of the outstanding stock of Chiquita for $13.00 per share in cash, is inadequate and not in the best interests of Chiquita shareholders,” the company’s board said in a statement.

Cutrale and Safra’s surprise offer Monday represented a 29 percent premium over Chiquita’s closing price Friday. After Chiquita’s rejection of the buyout offer Thursday, the company’s stock fell less than 1 percent in after-hours trading but remained above $13 a share.

The companies, both of which are privately held, could choose to raise their offer, possibly starting a bidding war for Chiquita.

“We believe that there exists (the) chance for the buyers to raise their bid,” Brett Hundley, an analyst with BB&T Capital Markets, wrote in a note to investors earlier in the week. “As any potential bid approaches $15 or higher, we would expect the (Chiquita) board decision to become more difficult.”

Though the directors have rejected the Brazilian companies’ first offer, Chiquita shareholders will still have their say. Chiquita is set to hold a special meeting Sept. 17 for its shareholders to vote on the Fyffes deal, which would combine the two companies in an all-stock deal that would create the world’s largest banana company.

Chiquita’s directors said Thursday that they’re encouraging shareholders to vote for the Fyffes deal.

“Chiquita 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,” the company said Thursday.

Chiquita and Fyffes plan to close their deal by the end of the year. Cutrale and Safra say if they start negotiations immediately, they could acquire Chiquita by then as well.

“Our proposal provides greater and more certain value to Chiquita’s shareholders than the previously reported Chiquita‐Fyffes transaction,” Cutrale and Safra said.

About 320 people work for Chiquita in Charlotte. The company was lured from Cincinnati in 2011 with about $22 million worth of state and local incentives tied to job creation. While Chiquita has said it would keep most of its jobs in Charlotte after its merger with Fyffes, the combined company would be based in Dublin, allowing it to take advantage of Ireland’s lower corporate tax rate.

Cutrale and Safra haven’t said what might happen to Chiquita’s uptown Charlotte headquarters.

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