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SAO PAULO, Oct 20 (Reuters) - Brazilian juice maker Grupo Cutrale and investment firm Safra Group criticized late on Monday a decision by proxy advisory firm Institutional Shareholder Services recommending shareholders of takeover target Chiquita Brands International Inc vote for a plan to merge with rival Fyffes Plc.
In a reversal of a previous stance made public in September, ISS said Fyffes' revamped all-stock offer worth $11.80 per share is lower than Cutrale-Safra's all-cash $14 per share proposal but will give shareholders of Chiquita more control of the combined company.
Cutrale-Safra said in a statement that the ISS recommendation "runs counter to the valuation that the investment marketplace has placed on the Fyffes transaction," and warned that Chiquita shares would be subject to downward pressure unless their all-cash offer was accepted.
Chiquita shed more than 4 percent to $12.80 after Chiquita unveiled the ISS recommendation, while shares of Ireland-based Fyffes jumped about 4 percent, which Cutrale-Safra said signals that only Fyffes shareholders "are getting the benefit of the recommendation."
Chiquita quoted ISS in a statement on Monday as saying that the Cutrale-Safra offer "does not appear to offer a sufficient premium to the value of the Chiquita-Fyffes combination."
ISS declined to comment.
Chiquita has scheduled a special shareholder meeting on Oct. 24 to vote on the deal.
ISS had originally recommended shareholders of the Charlotte, North Carolina-based banana producer vote against the company's proposed merger with Fyffes and adjourn a shareholder meeting to push the company's board to negotiate with Cutrale-Safra.
Fyffes later that month revised the terms of the merger to increase Chiquita's share of the combined entity to 59.6 percent from 50.7 percent in a bid to stave off Cutrale-Safra's competing bid for Chiquita.
"ISS appears to have accepted without question the projections being promoted by the Chiquita board to try to entrench itself and to push through the board's deal with Fyffes," the statement from Cutrale-Safra said. "It relies on wild-eyed projections that have neither historical basis nor support in current financial performance." (Reporting by Guillermo Parra-Bernal in São Paulo and Ramkumar Iyer in Bangalore; Editing by Lisa Shumaker)