Chiquita, Brazilian companies vie for shareholder support
09/02/2014 11:32 AM
09/02/2014 6:38 PM
With a shareholder vote just two weeks away, Charlotte’s Chiquita Brands International and two Brazilian companies are intensifying their respective campaigns to win over investors.
Shareholders will be asked at a Sept. 17 meeting in Charlotte to pick between the Brazilian companies’ offer to buy the banana giant, or an all-stock deal to combine Chiquita with Irish produce company Fyffes.
While Chiquita and Fyffes have previously said most of the corporate jobs in Charlotte would remain, it’s not clear what impact a deal with the Brazilian companies could have on Charlotte jobs.
On Tuesday, the parties ramped up their efforts to convince shareholders of the merits of their individual deals.
In a letter to shareholders, Chiquita took aim at what it called “flawed” calculations underlying the unsolicited offer from the Brazilian companies, Cutrale and Safra. Chiquita reiterated its view that the companies’ cash offer of $13 a share, or $611 million, undervalues Chiquita.
Chiquita says that the buyout offer from the Brazilian companies is “opportunistic” and based off a weak point in Chiquita’s stock price. In the proposed merger with Fyffes, Chiquita shareholders would receive just over 50 percent of the merged company’s stock.
In a proxy statement Tuesday, Cutrale and Safra said they are seeking shareholders’ votes against the March merger agreement between Chiquita and Fyffes. The cash deal offered by the Brazilian companies is “far superior” for Chiquita shareholders, the filing says.
In its letter, Chiquita said the companies’ proposal is “misleading, misrepresented and inadequate.” In a press release Tuesday, Chiquita said its board “will not negotiate a sale of the company at an inadequate price.”
Chiquita’s board rejected the Brazilian companies’ offer about two weeks ago.
Chiquita calls the Fyffes merger a better one for shareholders. The combined company could save $60 million a year by merging their operations, Chiquita and Fyffes have said.
Among other things, Chiquita says a merger with Fyffes would mean added geographic diversification and reduced exposure to any single market.
Cutrale, an orange-juice maker, and the Safra Group, a banking conglomerate, made their offer to buy Chiquita last month. The companies say their cash deal would give shareholders an immediate payout, minus the uncertainty of a merger.
In the proxy statement, Cutrale and Safra said an offer of $13 a share represents a “highly compelling” premium of 29 percent to Chiquita’s closing share price of $10.06 on Aug. 8, the last trading day before Cutrale and Safra announced their offer.
A spokeswoman for the Brazilian companies could not be reached for comment. A spokesman for Chiquita also could not be reached.
Chiquita relocated to Charlotte from Cincinnati two years ago. State and local incentives worth roughly $22 million tied to job creation were used to lure the company. Chiquita employs more than 300 people in uptown.
The company’s logo is on the NASCAR Plaza building. Chiquita’s chief executive, Ed Lonergan, has said the logo will stay there in the event of a merger.
It’s not clear what might happen to the Chiquita Classic golf tournament in a merger or buyout. The event is scheduled to host the second leg of the Web.com Tour Finals this week at River Run Country Club in Davidson.
Chiquita shares closed down more than 1 percent Tuesday at $13.65.
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