UPDATE 1-Chiquita board rejects Cutrale-Safra offer, may weigh improved bid
(Adds share performance, comment from Cutrale-Safra)
By Guillermo Parra-Bernal
SAO PAULO Oct 16 (Reuters) - The board of Chiquita Brands International Inc on Thursday said a takeover bid by Brazilian juice maker Grupo Cutrale and investment firm Safra Group was "inadequate," and again recommended shareholders back a tie-up with Irish rival Fyffes Plc.
The board of Charlotte, North Carolina-based Chiquita said in a statement that Cutrale-Safra's definitive, $14 a share offer "is not in the best interests" of shareholders, who have no assurances that the takeover proposal would remain available past Oct. 24 should a vote on the Fyffes transaction fail.
"The Cutrale-Safra offer, in our judgment, is not a compelling alternative to ChiquitaFyffes as it limits the ability of Chiquita shareholders to realize the long-term value inherent in a combination," the statement said.
Chairwoman Kerrii B. Anderson and Chief Executive Officer Edward Lonergan said they are "always willing to give fair consideration to an increased offer by Cutrale-Safra."
Shares of Chiquita shed 1.6 percent to $13.60. Fyffes tumbled 3.8 percent to 0.9559 euros.
Chiquita estimates the present value of the future share price range of the combined company, which will be named ChiquitaFyffes, at between $15.46 and $20.01 under the assumption of growth in earnings before interest, tax, depreciation and amortization of 5 percent to 15 percent next year, and a valuation multiple to 7 to 8 times annual EBITDA.
On Wednesday, Cutrale-Safra offered $14 in cash per Chiquita share, valuing the company at $658 million, or 12.4 times annual EBITDA. Cutrale-Safra's definitive offer represents premiums of about 40 percent to Chiquita's Aug. 8 closing share price and 19 percent to Chiquita's price based on revamped terms of the tie-up with Fyffes. Continuación...