The two Brazilian groups that made a tilt at purchasing Chiquita Brands International (NYSE: CQB) last week have made fresh moves after the bid was rejected by the company’s board.
The Cutrale Group and the Safra Group, through their entity Cavendish Global Limited and its wholly owned subsidiary Cavendish Acquisition Corporation (known as ‘Cutrale-Safra’), has filed proxy materials calling on CQB shareholders to reject the proposed merger with Fyffes Plc (ESM: FFY) which goes up for vote on Sept. 17.
“These proxy materials enable Chiquita shareholders to send a clear message to the Chiquita Board that its failure to enter into discussions with Cutrale-Safra and its decision to reject the superior Cutrale-Safra proposal is simply a continuation of their track record of failed strategic decisions and shareholder value destruction,” Cutrale-Safra said in a release.
“We are soliciting proxies from Chiquita shareholders to vote “AGAINST” the Fyffes transaction proposal and the related Fyffes proposals and “FOR” the Adjournment Proposal. We believe the proposed combination of Chiquita and Fyffes does not provide adequate value to Chiquita shareholders,” the proxy materials said.
“Our $13.00 per share all-cash proposal is a superior alternative for Chiquita shareholders because, among other things, it provides significantly greater financial value and more certain value for Chiquita shareholders than the proposed combination with Fyffes.”
In the wake of the Chiquita board’s recommendation against the proposal, the Brazilian entities expressed their “disappointment”, highlighting that the market “clearly recognized” the proposal provided greater and more certain value to shareholders than the Chiquita-Fyffes transaction would.
Last week, a coordinating group for Latin American banana worker unions expressed concern about recent legal cases with Cutrale that involving the illegal outsourcing of workers and discrimination against pregnant women.
Banana Link international coordinator Alistair Smith questioned the type of corporate social responsibility that Cutrale would bring to Chiquita, which itself has made a great deal of progress on social fronts in the last 15 years.
“If you haven’t got strong management behind a fairly integrated corporate social responsibility policy and practice, it could quite quickly disappear and all those relationships [with worker groups] could be thrown on the rocks,” Smith said.
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