Fyffes' shareholders yesterday approved the demerger of the group's general produce business from its tropical fruit division, in a move the company claims will create more value for shareholders.

Currently Fyffes has two distinct businesses, the general produce and distribution unit and the tropical produce section. Addressing shareholders at an egm in Dublin yesterday, chairman Carl McCann said both units were currently undervalued by the market and that separating them will bring a dedicated focus to each. This follows a spin-off earlier in the year of the group's property assets into another new entity, Blackrock International, which is traded on Dublin's IEX.

Under the terms approved yesterday, shareholders will receive one share in the new company, to be known as Total Produce, for every one Fyffes share currently held. Fyffes will delist from Dublin and London's main markets and both companies will list their shares on the AIM and IEX starting early next year.

Mr McCann said he believes each company's shares should be valued at about €1. This compares with a €1.64 closing price yesterday for the combined group.

According to Mr McCann, such a listing will enable both groups to grow to their full potential without some of the restrictions, such as shareholder approval for acquisitions, as required by the main markets. Unlike with the Blackrock spin-off, Fyffes won't hold any shares in Total Produce.

Separately, Mr McCann denied any knowledge of a property developer seeking to build up a stake in Blackrock and said Fyffes has no intention of disposing of its 40 per cent stake in the property group.

He said Blackrock, of which he is also chairman, was performing well and is on target to double its gross asset base.