(Recasts to add details on Safra, Cutrale operations, deal rationale throughout)
By Olivia Oran and Greg Roumeliotis
Aug 11 (Reuters) - Juice maker Cutrale and investment firm Safra Group said on Monday they had offered to acquire U.S.-based Chiquita Brands International Inc in a $610.5 million cash deal that rivaled an all-stock agreement with Irish tropical fruit company Fyffes Plc.
Cutrale, based in Brazil, and Safra, a global banking and real estate group with strong roots in Brazil, said they were offering $13 per share in cash to Chiquita shareholders, a 29 percent premium to Chiquita’s closing price on Friday.
Chiquita is attempting to close a merger with Fyffes, which the two companies announced in March. The combined market value of Chiquita and Fyffes is currently close to $1 billion.
Shares of Chiquita rose more than 30 percent in response to the competing offer. They ended the day at $13.30 on the New York Stock Exchange, above the offer price of $13, indicating that investors may expect a bidding war for the company. Shares of Fyffes fell more than 13 percent on Monday.
Faced with years of declining orange juice consumption globally, Cutrale is expanding into other geographies and products after venturing into grain trading in recent years. The presence of the conglomerate controlled by Brazilian-Lebanese financier Joseph Safra could give Cutrale the financial muscle it needs to outbid Fyffes, analysts said.
The Cutrales are extremely media-shy given the vast wealth they have acquired. They rose to prominence in the 1960s when they began to export orange juice concentrate to the United States after frost destroyed most of Florida’s citrus crop.
The Safras stood out as a Brazilian family whose businesses grew transnational but also remained loyal to their local roots. While banking is the axis of his activities, Joseph Safra has for years diversified his wealth by investing in paper and pulp, global real estate, telecommunications and cattle ranching.
Joseph Safra is ranked as the world’s 60th richest man with a net worth of $15.7 billion, according to Forbes Magazine.
Both groups said their proposal had been sent to Chiquita’s board of directors and urged the company to enter negotiations that will lead to a definitive takeover agreement. They hope to have a response from Chiquita by Friday.
Timing for the new offer comes as Chiquita stabilizes its earnings and as a lawsuit accusing the company of funding a paramilitary group in Colombia was dismissed by a U.S. appeals court, according to a person familiar with the proposed deal. Shares of Chiquita have also fallen since the Fyffes deal was announced.
Under the deal with Fyffes, the new firm was expected to be listed in New York but domiciled in Ireland for tax purposes. Washington is trying to curb so-called inversions, in which U.S. corporations move their tax domiciles abroad to countries with a lower tax rate.
Spokesmen for Chiquita were not immediately available for comment. Safra, Cutrale and Fyffes declined to comment.
The $7 billion global banana market is controlled by Chiquita, Fresh Del Monte Produce Inc, Hawaii-founded Dole Food Company and Fyffes. (Additional reporting by Martinne Geller in London and Guillermo Parra-Bernal in Sao Paulo; Editing by Chizu Nomiyama, Tom Brown, David Gregorio and Jonathan Oatis)