US-based banana firm Chiquita Brands International has rejected a take-over bid of $611m from Brazilian firms Cutrale and Safra groups, saying that the deal is not in the best interest of its shareholders.
Earlier this week, juice maker Cutrale and investment firm Safra Group offered a price of $13 per share to acquire all of Chiquita's outstanding common stock. This price was 29% more than Chiquita's closing price on 8 August.
Rejecting this bid, Chiquita's board intends to approve the merger agreement with Irish firm Fyffes, which was announced in March.
Based in Dublin, Fyffes is involved in the production, procurement, shipping, ripening, distribution and marketing of bananas, pineapples and melons.
If the $1bn merger goes ahead, Chiquita will become the largest banana brand in the world. Currently, the global banana market is controlled by Chiquita, Dole Food Company, Fresh Del Monte and Fyffes.
Further, the merger deal will help Chiquita to avoid payment of higher taxes in the US as it could able to shift its statutory headquarters to Ireland.
In a separate statement, Cutrale Group and Safra Group said that they are disappointed with the decision of Chiquita's Board to reject their $13 per share all-cash offer.
The two Brazilian firms said that their offer was much favourable than the proposed merger with Fyffes for the shareholders of Chiquita.
Cutrale has been planning to expand into different markets in an effort to combat the declining orange juice consumption and the backing of global investment firm like Safra would give it the much required financial muscle to flex in the global market.
