Chiquita to talk with potential buyers
NEW YORK (AP) — Not even a month after flatly rejecting a takeover bid by two Brazilian companies, Chiquita softened its stance and will open its books to them.
Should Chiquita eventually see eye-to-eye with the investment firm Safra Group and Cutrale Group, a juice company, it could scuttle a proposed tie up with the Irish fruit company Fyffes, a merger that is far along in the process.
Chiquita did not elaborate Wednesday on why it had decided to talk with the Brazilian group and sign a confidentiality agreement. It said that it would "allow Cutrale / Safra to conduct due diligence, including access to a data room and its management team."
But Chiquita has been pressured to do so by two proxy advisory firms, and company shares have come under pressure.
There has also been pushback on a national level against the type of deal Chiquita is trying to arrange with Fyffes, which would move the banana company's headquarters to Ireland.
The new company, called ChiquitaFyffes PLC, would allow Chiquita to lower its U.S. tax rate.
Treasury Secretary Jacob said this week that the Obama administration would decide "in the very near future" what it could do to make it less profitable for U.S. companies to shift their legal addresses to other countries, a maneuver called an "inversion."
Political leaders like Sen. Dick Durbin of Illinois, the No. 2 Democrat in the Senate, have lashed out at inversions, saying that they increase the tax burden on everyone else.
Safra and Cutrale offered $611 million for Chiquita. The proposed merger with Fyffes is an all-stock deal that would move Chiquita's company headquarters from Charlotte, North Carolina, to Dublin, where Fyffes is based.
Shares of Chiquita Brands International Inc. rose 12 cents to $13.93 in midday trading.