Brazilians formally engage with Chiquita

Companies connected to the Brazillian billionaires Joseph Safra and Jose Luis Cutrale, who have made a bid for Chiquita that threatens to scupper its proposed $1 billion merger with Fyffes, yesterday announced they have formally engaged with the company.

Cutrale-Safra said it had withdrawn a threat to put forward a motion at an October shareholders meeting of Chiquita that would force the US company's board to consider its $13 a share bid.

It said it would not seek proxies to force the board’s hand if Chiquita committed to seeking an adjournment of the October meeting of no more than 21 days.

Cutrale-Safra said it is “not tied” to a deadline of September 16th earlier placed upon it by Chiquita to complete due diligence and lodge a binding bid, but “will use its best efforts to [do so] as expeditiously as possible”.

The Brazilians said they had also entered into a confidentiality agreement with Chiquita, while they pore over its books as markets anticipated they could lodge a higher bid.

The merger, which was originally announced in March, was due to be put to a vote of Fyffes shareholders and Chiquita shareholders in Dublin at simultaneous meetings next Wednesday, but these meetings were postponed until October 3rd to give the US company a chance to engage with the rival bidder.

Merrion analyst David Holohan believes the merger could still go ahead unless Cutrale-Safra raises its bid for Chiquita to about $16 a share.