SAO PAULO (Reuters) - Brazilian juice maker Grupo Cutrale and investment firm Safra Group on Thursday raised their offer for Chiquita Brands International Inc CQB.N, a day before the U.S. banana producer’s shareholders vote on a merger with Irish rival Fyffes Plc FFY.I.
Cutrale-Safra raised the all-cash offer to $14.50 per share from $14 on Oct. 15, valuing Chiquita at about $682 million, or 12.5 times annual earnings before interest, tax, depreciation and amortization. The offer represents a premium of 14 percent to Chiquita’s closing price on Wednesday.
Shares of Chiquita posted their largest intraday jump since Aug. 11, rising as much as 8.87 percent in New York to trade at $13.87. Fyffes shares rose 0.5 percent to 1.02 euros in Dublin.
Fyffes and Chiquita recently said the implied present value of their deal ranges from $15.46 to $20.01 a share.
Cutrale-Safra said in a statement that the offer was valid until Oct. 26. It added that there could be no assurance that the proposal would be extended or a new one would be made, even if Chiquita’s shareholders’ meeting on Friday is “adjourned, postponed, suspended, placed into recess, canceled or delayed.”
Chiquita will carefully review and consider the revised Cutrale-Safra offer, it said in a statement.
A successful bid would expand billionaires Joseph Safra and José Luis Cutrale’s share of the world tropical fruit market and their negotiating clout with supermarkets.
Chiquita and Fyffes agreed to merge in April to create the world’s biggest banana supplier.
The updated offer represents “the highest comparable transaction multiple for an acquisition of this scale in the fresh produce sector based on the EBITDA multiples of comparable transactions,” Cutrale-Safra said in the statement.
Wynnefield Capital, which holds 3.5 percent of shares in Chiquita, reiterated its support for the Cutrale-Safra bid in a statement, calling the increase in the offer price “significant.”
Shares of Charlotte, North Carolina-based Chiquita have shed two-thirds of their value over the past decade in the face of geopolitical instability in Latin America, price volatility and uneven demand for fresh produce around the world.
Chiquita, Fyffes, Fresh Del Monte Produce Inc (FDP.N) and Dole Food Co control the $7 billion banana market.
Investors including Dublin-based Merrion Capital Group, which oversees $1.6 billion in assets, have said that only a bid of about $15 a share could persuade Chiquita’s board and shareholders to side with Cutrale-Safra.
Cutrale-Safra’s senior management team and legal and financial advisers will remain available to discuss the revamped offer with Chiquita’s board, the statement added. Credit Suisse Group AG CSGN.VX is advising both companies on the Chiquita takeover plan.
Reporting by Guillermo Parra-Bernal; Editing by Lisa Von Ahn and Alan Crosby