SAO PAULO, Oct 15 (Reuters) - Juice maker Grupo Cutrale and investment firm Safra Group raised on Wednesday an offer to acquire U.S.-based Chiquita Brands International Inc, in its latest bid to scuttle an all-stock agreement with Irish tropical fruit company Fyffes Plc.
In a statement, Cutrale-Safra announced an all-cash “definitive offer” to acquire Chiquita’s outstanding stock for $14 a share, compared with the prior proposal of $13 made on Aug 11. The sweetened proposal values Chiquita at about $658 million, or the equivalent of 12.4 times annual earnings before interest, tax, depreciation and amortization, the statement added.
If the unsolicited bid is successful, it would turn billionaires Joseph Safra and José Luis Cutrale into the global kings of breakfast, controlling a sizable share of the global trade of tropical fruits and growing negotiating power over supermarkets. Chiquita had agreed in March to merge with Fyffes to create the world’s biggest banana supplier.
Cutrale-Safra’s revamped offer represents a premium of about 40 percent to Chiquita’s closing share price of $10.06 on Aug. 8 and is 19 percent higher than Chiquita’s price based on the revised terms of the transaction with Fyffes. The Chiquita buyout will be financed with equity from Cutrale’s and Safra’s units, and Safra-controlled J. Safra Sarasin AG plans to make a tender for Chiquita’s 7.875 percent senior secured notes due in 2021.
“Unlike the proposed combination with Fyffes, the superior Cutrale-Safra offer provides Chiquita shareholders complete certainty with respect to the value of their Chiquita investment,” the statement added.
Shares of Chiquita jumped 4 percent to $13.69 in New York, extending gains to 23 percent over the past three months. Fyffes slumped 3.2 percent.
Known as a tough negotiator for the banking and real estate assets he buys, Safra, the Lebanese-Brazilian financier who is the world’s richest banker, has found it hard to convince Chiquita’s board to accept his and Cutrale’s offer, bankers with knowledge of the deal told Reuters recently. That was partly because potential cost savings from the deal are not immediately clear for investors.
The consortium submitted the sweetened offer to Chiquita’s board, together with a form of merger agreement, the statement added. In the statement, Cutrale-Safra said investors recognize “the significant risks and issues inherent in the Chiquita-Fyffes combination,” adding that financial data the company unveiled on Tuesday “indicates the difficulty Chiquita will face in meeting its stated 2014 targets.”
Efforts to get a comment from Chiquita and Fyffes were unsuccessful. (Reporting by Guillermo Parra-Bernal; Editing by Meredith Mazzilli)