Brazilian companies press fight for Chiquita

08/26/2014 6:11 PM

08/26/2014 6:11 PM

Two Brazilian companies trying to buy Charlotte-based Chiquita Brands International took their case to an influential shareholder advisory firm Tuesday, seeking to win support to preempt Chiquita’s planned merger with an Irish produce firm.

Cutrale, a juice company, and the Safra Group, a banking and real estate conglomerate, made an unsolicited offer two weeks ago to acquire Chiquita for $13 a share, or $611 million. That’s a 29 percent premium to Chiquita’s share price before the offer.

When Chiquita turned down the offer and decided to stick with Dublin-based Fyffes, Cutrale and Safra said they were going to shareholders. The companies are trying to win enough shareholder support to block the Chiquita-Fyffes deal at a Sept. 17 vote.

According to securities filings, Cutrale and Safra made a presentation Tuesday to Institutional Shareholder Services, an advisory group that recommends to shareholders how to vote. A recommendation from ISS typically carries a lot of weight with shareholders, especially institutional holders.

In their presentation, Cutrale and Safra said their proposed acquisition of Chiquita is better than a merger with Fyffes because it offers shareholders an immediate payout, without the uncertainty of a merger. The Brazilian firms called the Fyffes deal a “misguided, highly risky” combination, and said Chiquita’s management has a track record of bad business decisions and a “proven record of value destruction.”

Cutrale and Safra said in the presentation that they “have heard from many of (Chiquita’s) shareholders,” but didn’t give any details.

Chiquita would move its combined headquarters to Ireland after the Fyffes deal. Cutrale and Safra also argued that backlash against so-called “inversion” deals, in which U.S. companies move to lower-tax countries, could undermine the deal.

A Chiquita spokesman was not immediately available for comment.

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