Shares of Chiquita Brands International closed down sharply Monday after a major institutional investor in the banana market giant said it would not back Chiquita’s plan to buy Ireland-based rival Fyffes.
Wynnefield Capital, which owns 3.5% of Chiquita, instead endorsed the $14-a-share revised offer for Chiquita announced last week by the Cutrale Group and Safra Group, a team of Brazil-based corporate suitors pursuing an unsolicited Chiquita takeover bid.Chiquita shares closed down nearly 4.2% at $12.80 in Monday trading — despite newly announced support for its Fyffes acquisition plan from an influential shareholder advisory organization.
Wynnefield’s announcement came after Chiquita on Thursday rejected the latest Cutrale-Safra offer and reaffirmed its plan to buy Fyffes in a deal aimed at creating the world’s largest banana company.”In our analysis, the Cutrale-Safra Group proposal provides clearly superior shareholder value to the Fyffes transaction, and the Chiquita Board’s self-serving behavior threatens significant harm to shareholders,” said Wynnefield President Nelson Obus in a written statement.
He projected that Chiquita shares would fall by $2 to $2.50 if the Fyffes transaction won approval during this Friday’s scheduled vote by the company’s shareholders.