The Brazilian combination of Cutrale and Safra has today (23 October) announced it has submitted an updated definitive offer to the Chiquita board, in a bid to acquire all of the outstanding stock of Chiquita Brands International for US$14.50 per share in cash – an increase on the US$14 per share offer made last week.
According to the Brazilians, the US$14.50 per share cash offer represents a "compelling premium" of approximately 14 per cent when compared to the closing price of Chiquita's shares on 22 October 2014, a price that the group said "substantially overstates the value of the Fyffes transaction as it is still very much incorporating support by the Cutrale-Safra offer".
In fact, based on the trading value of the stock,Cutrale-Safra believes that the effective premium to the Fyffes transaction is now around or in excess of 20 per cent.
The groups also noted that the deal represented a "highly attractive" premium of over 44 per cent to the investment marketplace’s valuation of the original proposed Chiquita transaction with Fyffes, based on Chiquita’s undisturbed closing price of US$10.06 as of 8 August.
The offer also means an approximately 23 per cent premium to Chiquita’s adjusted stock price of US$11.80, based on the revised Fyffes’ transaction, a multiple of approximately 12.5 times Chiquita’s EBITDA, including the assumption of Chiquita net debt, for the twelve months ended 30 June 2014, and the highest comparable transaction multiple for an acquisition of this scale in the fresh produce sector based on the EBITDA multiples of comparable transactions, the Brazilians noted.
Cutrale-Safra’s revised definitive offer will remain open until 26 October 2014, subject to certain termination events, that are identical to the Offer Termination Events contained in its October 20 Offer Letter, Cutrale-Safra noted.
Chiquita shareholders are due to vote on whether to accept or reject the merger proposal, or indeed to adjourn the decision until a later date.