Chiquita Brands International, which in March announced a proposed merger with Dublin, Ireland-based Fyffes plc, received an unsolicited $611 million buyout offer from the Cutrale Group and the Safra Group.
The pair of companies proposed to acquire 100 percent of the outstanding stock of Chiquita Brands Inc. at a price of $13 per share in cash to Chiquita shareholders. This proposal represents a premium of 29 percent to Chiquita's closing share price of $10.06 as of Aug. 8; however, since the offer was announced Chiquita's stock has risen to more than $13 per share.
The proposal was conveyed to Chiquita in a letter to Kerrii Anderson, chairwoman of the Chiquita board of directors, and Edward Lonergan, Chiquita's president and chief executive officer.
"If we are able to proceed on a timely basis with due diligence and discussions, we will be in a position to close the transaction before the end of the year, within the same timeframe [Chiquita has] indicated for the Fyffes transaction, without the execution risk and uncertainty inherent in that transaction," the senior management team's Michael Rubinoff said on behalf of the Cutrale Group and the Safra Group.
"Our proposal also offers a superior valuation compared to Chiquita's historical trading multiples," he said in the letter. "The proposed price, including the assumption of Chiquita net debt, represents an 11.8x multiple of Chiquita's last twelve months reported Adjusted EBITDA."
The proposed offer is not subject to any financing conditions.
"We believe discussions of a potential transaction are now particularly timely and appropriate as a result of the dismissal of the civil claims relating to Chiquita's alleged involvement in the actions by the United Self-Defense Forces of Colombia, the results from your recent second quarter earnings announcement, and the market's valuation of the Fyffes transaction," Rubinoff said.
The Cutrale Group, which accounts for over one-third of the $5 billion orange juice market, has operations that include oranges, apples, peaches, lemons and soybeans. The Safra Group is an international group of companies and assets controlled by Joseph Safra. The Safra Group, with assets under management of over $200 billion and aggregate stockholder equity of approximately $15.3 billion, operates banks and invests in other businesses.
The companies asked Chiquita to respond by noon on Friday, Aug. 15.