Chiquita-Fyffes revised agreement benefits Chiquita shareholders
Chiquita-Fyffes revised agreement benefits Chiquita shareholders
Chiquita Brands International Inc. and Fyffes plc have approved a revised agreement for the proposed combination of the companies. Under the terms of the amended agreement, Chiquita shareholders are expected to own approximately 59.6 percent of ChiquitaFyffes, an increase from 50.7 percent under the previous agreement.
The companies have also increased the termination fee payable to Fyffes from 1 percent to a more customary 3.5 percent of the total value of the issued share capital of Chiquita. In addition, under the revised agreement, Fyffes will also have the right to terminate the transaction if Chiquita shareholder approval is not obtained on or prior to Oct. 24, 2014. In such event, Fyffes may be entitled to a termination fee if Chiquita enters into another transaction within nine months.
"We are pleased with the increased value that these enhanced terms for Chiquita bring to our shareholders," Ed Lonergan, Chiquita's chief executive officer, said in a press release. "The Fyffes transaction is a natural strategic partnership that brings together two complementary companies to create a combined company that is better positioned to succeed in a highly competitive marketplace, while driving strong performance and value for shareholders as well as immediate benefits for customers and consumers worldwide."
"The combination of Chiquita and Fyffes is strategic and compelling, creating the No. 1 banana company globally, with synergies that can only be achieved by these companies coming together," David McCann, Fyffes executive chairman, said in the release. "This revised binding agreement, along with the additional synergies recently announced, reinforces our conviction that the Combination is the value-maximizing opportunity for both companies' shareholders."
Chiquita's board has reaffirmed its recommendation that Chiquita shareholders vote for the Fyffes transaction; however, on Sept. 8 Fyffes granted Chiquita a waiver that permits it to engage in discussions with the Cutrale Group and the Safra Group, which had previously offered Chiquita a $611 million buyout offer.