Cutrale-Safra Group Increases Chiquita Buyout Offer to $680 Million
CHARLOTTE, NC - Just days after their latest offer was rejected, Brazilian firms Cutrale/Safra have yet again raised their offer for Chiquita to about $682 million (before interest, tax, depreciation, and amortization), an approximate 4% increase from their previous $658 million bid. The offer is valid until October 26, with no assurance made that the new bid would be extended even if Chiquita’s shareholders’ meeting on Friday was “adjourned, postponed, suspended, placed into recess, canceled, or delayed.”
Chiquita has since acknowledged receipt of the new bid, saying in a statement that the Board of Directors will “carefully review and consider the revised Cutrale/Safra offer.”
In after hours trading, Chiquita’s stock was up $1.02 to $13.76, an 8.01% increase as of October 23, 2014 at 4:03 PM ET.
According to Reuters, Fyffes and Chiquita said that the implied present value of their deal ranges from $15.46 to $20.01 a share. In comparison, this latest bid from Cutrale/Safra values Chiquita at $14.50 a share.
The revised 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 a statement, Reuters reports.
Firms including Wynnefield Capital and Institutional Shareholder Services (ISS) voiced their opinion shortly following the announcement of the new bid. Wynnefield Capital, which holds 3.5% of Chiquita’s shares, called the increased offer “significant,” according to Reuters. Similarly, ISS said that the bid may be “more compelling to some shareholders,” though it had initially recommended a deal with Fyffes.
In a letter to Cutrale/Safra, Chiquita had declined the former $658 million bid, calling it “inadequate” and “not in the best interest of Chiquita shareholders.” Will this new offer be enough?
Stay tuned to AndNowUKnow as we continue to bring you the latest on any Chiquita merger updates.
