Fyffes allows Chiquita negotiate with rival

Fyffes has granted its proposed merger partner Chiquita permission to talk to rival bidder, Cutrale-Safra.

Fyffes and Chiquita yesterday announced the adjournment of their EGMs, where shareholders were due to vote on their proposed merger until October 3.

The meetings were originally set for Wednesday of next week.

The move follows three leading shareholder advisory firms — ISS, Glass Lewis and Egan-Jones — urging Chiquita to postpone its shareholder vote and start talking to Cutrale.

Last month, Chiquita — which has been planning a merger with Dublin-based Fyffes since March — turned down a $13 per share/ $611m takeover approach from Brazilian juice giant, Cutrale and its investment backer, Safra, on the grounds that the offer was inadequate.

However, it has since come under fire from shareholder advisory groups for its position.

Yesterday, Fyffes — at Chiquita’s request — granted the US firm a waiver to its existing transaction agreement, permitting it to postpone its shareholder vote and engage in discussions with Cutrale- Safra.

Chiquita has written to the Brazilian entity, requesting its best and final offer.

In a brief statement, Fyffes said that both it and Chiquita “continue to recommend that their respective shareholders vote for the combination”.

“A protracted process is not in the interests of Fyffes business and shareholders,” it added.

Despite the update, Fyffes’ share price was up by over 2% yesterday, at 98c.

However, its stock has dipped sharply of late — falling by around 6% in the past week and by almost 9% in the past month.

Fyffes and Chiquita recently jointly said that an additional $20m (€15m) worth of merger synergies had been identified.

In a counter-statement, Cutrale-Safra said Chiquita’s move was “a blatant attempt” to frustrate its shareholders and reject the advisory services’ recommendations.

It said that the new October 3 timetable was “absurd and totally unacceptable” and that Chiquita was trying to preserve the “now-discredited Fyffes transaction”.

“Chiquita has not set the timetable with a view to maximising value to its shareholders,” it said.

It claimed that Chiquita was seeking to impose an eight-day deadline for the completion of due diligence and the submission of a fully-binding offer.