Rival suitor still hoping Chiquita will jilt Fyffes at merger altar

Brazilian bidder Cutrale-Safra has submitted an improved bid for US banana producer Chiquita Brands.

The revised $14 (€10.90) per share/$660m, up from a previously rejected one of $13 per share/$611m, came hours after Chiquita reported a strong set of preliminary third-quarter results and reiterated its preference to merge with Irish fruit distributor, Fyffes.

Despite the European Commission recently clearing the proposed Fyffes-Chiquita merger and the terms of said deal being altered to give Chiquita shareholders a bigger stake of the new entity, both firms had postponed shareholder votes until the end of this month to give time for Chiquita to talk to Brazilian juicemaker Cutrale and its investment company backer, Safra.

Cutrale-Safra said its revised bid offers a premium of around 40% to the valuation of the original Fyffes-Chiquita proposal and a 19% premium to the adjusted stock price based upon the revised merger terms.

It also represents a multiple of more than 12 times Chiquita’s Ebitda for its last financial year.

The Brazilians said their proposal was the only one offering Chiquita’s shareholders “complete certainty with respect to the value of their Chiquita investment”, adding that there shouldn’t be any regulatory obstacles halting a prompt conclusion to a deal once an agreement is reached.

“We believe the investment marketplace recognises the significant risks and issues inherent in the Chiquita-Fyffes combination, all of which cast serious doubts about the potential business performance of the combined Chiquita-Fyffes and the ability to integrate as well as realise potential synergies,” Cutrale-Safra said in a statement.

Earlier, Chiquita had approximated its third quarter net sales at $739m, adding that Ebitda should reach expectations of between $25m and $27m. Cutrale-Safra said that the US firm could have difficulty in meeting its stated 2014 targets.

In its investor presentation, Chiquita reiterated its view that the revised Fyffes transaction “is significantly more favourable” to its shareholders based on numerous factors, including recognised additional synergies.

Analysts still believe the Fyffes deal will happen, on the basis of feeling that Cutrale’s revised bid doesn’t match the value of the proposed merger.