Cutrale, Safra go bananas with Chiquita takeover offer
Banana producer Chiquita Brands International, which is planning a tax inversion deal with Irish rival Fyffes, has received an unsolicited takeover offer worth a reported $611 million from a pair of private companies.
Reuters and other news outlets have reported juice maker Cutrale Group and Brazilian investment firm Safra Group have offered to buy Chiquita for $13 per share in cash, a 29% premium to Chiquita’s closing price on Friday.
The offer comes as Chiquita has sought to close its own merger with Irish tropical-fruit company Fyffes PLC. Chiquita earlier this month said the Fyffes deal was expected to win approval at a shareholder meeting next month, with the transaction anticipated to close by the end of 2014.
Chiquita later on Monday confirmed it received an unsolicited offer from Cutrale and Safra, adding its board and advisors would “carefully review and consider the offer.” The company said it would decline further comment on the offer under the review has been completed, though Chiquita also said it continued to “strongly believe” in the strategic merits and value provided by the proposed transaction with Fyffes.
Chiquita finds itself a potential takeover target as it generates stronger sales from bananas of late, while sales from the salads and healthy snacks it also sells have been less stellar. Comparable banana sales totaled $1.04 billion for the first six months of 2014, up 1.5% from a year ago, while salads and healthy snacks sales slid 4.3% to $479 million.
Though Chiquita’s banana sales volume in 2013 rose 2.5% from a year earlier, bolstered by the North America market, prices in that region and other markets abroad softened. The company’s primary markets are in North America and Europe, though it also generates sales in the Middle East and some other smaller markets.
Chiquita agreed in March to create the world’s biggest banana producer in a deal with Fyffes that would see the combined company’s tax base move to Ireland — an increasingly common move known as an inversion.
Corporate tax inversions have been criticized by politicians, including President Obama. Around 60 companies have traded in their American status for a foreign HQ and correspondingly lower tax rates, according to a recent Fortune cover story by Allan Sloan.