Juice maker Cutrale and investment firm Safra Group said on Monday that they offered to acquire Chiquita Brands International Inc. in a $610.5-million (U.S.) cash deal that rivalled an all-stock agreement with Irish tropical fruit company Fyffes PLC.
The offer comes as Charlotte, N.C.-based Chiquita is attempting to close a merger with Dublin, Ireland-based Fyffes, which the two companies announced in March. The combined market value of Chiquita and Fyffes is currently close to $1-billion.
Araraquara, Brazil-based Cutrale and Sao Paulo, Brazil-based Safra said they were offering $13 per share in cash to Chiquita shareholders, a 29-per-cent premium to Chiquita’s closing price on Friday.
Shares of Chiquita rose more than 30 per cent in response to the competing offer. They were trading at $13.30, above the offer price of $13, indicating that investors may expect a bidding war for the company.
Shares of Fyffes, meanwhile, fell more than 13 per cent on Monday morning.
Cutrale and Safra 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.
Cutrale and Safra said they hoped to have a response from Chiquita by Friday.
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. Fyffes declined to comment.
The $7-billion global banana market is controlled by Chiquita, Fresh Del Monte Produce Inc., Hawaii-founded Dole Food Co. and Fyffes.
Cravath Swaine & Moore LLP is advising Cutrale and Safra. Safra is controlled by the Brazilian Joseph Safra family.
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