Brazilian bid for Chiquita challenges big banana merger

Two Brazilian companies made a $611 million offer for US banana giant Chiquita Monday that could derail Chiquita's merger with European rival Fyffes. Cutrale Group, one of Brazil's largest juice exporters, and investment bank Safra Group offered $13 a share for all of Chiquita's stock, 29 per cent higher than the shares traded on Friday. The two said that they could bring Chiquita Brand International ‘extensive experience in all aspects of the fruit and juice value chain,’ and offered its shareholders ‘superior valuation’ to where the company's stock has been trading. The unsolicited offer challenged Chiquita's merger with Fyffes announced in March, which would create the world's largest banana company, with $4.6 billion in annual revenues. That proposal would allow Chiquita to avoid higher US taxes by relocating its statutory headquarters to Ireland. The all-stock deal between Chiquita and Fyffes was to be weighed by shareholders in a special meeting on September 17. But the offer by the Brazilian companies could jeopardize the merger by offering shareholders of Chiquita a quicker return. After the Fyffes deal was announced, Chiquita's shares slumped around 17 per cent before Monday's offer. ‘Chiquita will have no further comment on the Cutrale Group and the Safra Group's offer until the board has completed its review.’ Chiquita shares jumped 30.9 per cent to $13.17 in afternoon trade, according to AFP.