October 24, 2014
(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)
The planned acquisition of Fyffes PLC by Chiquita Brands International Inc. is the latest deal to join the list of terminated corporate inversions. This time, however, it was Chiquita’s shareholders who decided to kill the deal, voting to reject the transaction in light of a competing acquisition offer from rival bidder the Cutrale-Safra Group.
The battle for Chiquita has been ongoing for months, as Cutrale-Safra made a competing bid to acquire Chiquita in August after Chiquita agreed to acquire Fyffes in a $526 million stock-for-stock transaction in March. A completed deal between Chiquita and Fyffes would have allowed Chiquita to reincorporate in Ireland, as the companies would have become wholly owned subsidiaries of a newly formed Irish public limited company.
Chiquita rejected Cutrale-Safra’s initial bid of $13 and reaffirmed its commitment to the ChiquitaFyffes transaction, but Cutrale-Safra continued its takeover attempts. After Cutrale-Safra was unable to convince Chiquita’s board to terminate the Fyffes deal and accept its offer, the Brazilian-based wholesale orange juice supplier ultimately raised its bid to $14.50 in an attempt to convince Chiquita’s shareholders to reject the Fyffes transaction.
Chiquita to now engage with Cutrale-Safra
Cutrale-Safra’s plan worked, as Chiquita announced on Oct. 24 that its shareholders rejected the Fyffes deal. Specifically, the company announced that, “based on the votes cast at the Company’s Special Meeting of Shareholders held today Chiquita shareholders have not approved the revised transaction agreement with Fyffes plc.” Chiquita did not disclose the precise results of the vote, however.