Chiquita Brands International Inc (NYSE:CQB) Investor Files Lawsuit In Effort To Block The Proposed Acquisition By Fyffes

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Company Name(s): 
Chiquita Brands
Case Name: 
Chiquita Brands Deal Case 10/07/2014
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: CQB
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
10/07/2014
Summary: 

October 13, 2014 (Shareholders Foundation) - An investor, who currently holds NYSE:CQB shares, filed a lawsuit against the takeover of Chiquita Brands International Inc (NYSE:CQB) by Fyffes plc.

On March 10, 2014 Chiquita Brands International Inc (NYSE:CQB) and Fyffes plc (ESM: FFY ID: AIM: FFY LN) announced that the Boards of Directors of both companies have approved an agreement under which Chiquita Brands International Inc (NYSE:CQB) will combine with Fyffes plc, in a stock-for-stock transaction.

On August 11, 2014, Chiquita Brands International Inc (NYSE:CQB) confirmed that it has received an unsolicited offer from theCutrale Group and the Safra Group to acquire all of the outstanding common stock of Chiquita at a price of $13.00 per share in cash to Chiquita shareholders.

The plaintiff claims that the implied value that Chiquita shareholders were to receive pursuant to the original Fyffes transaction announced on March 10, 2014 was only approximately $10 per share.
Nevertheless on August 14, 2014, Chiquita Brands International Inc (NYSE:CQB) announced that its Board of Directors determined that the unsolicited offer from the Cutrale Group and the Safra Group announced on August 11, 2014, to acquire all of the outstanding stock of Chiquita for $13.00per share in cash, is inadequate and not in the best interests of Chiquita shareholders.

Then on September 26, 2014, Chiquita Brands International Inc (NYSE:CQB) and Fyffes plc (ESM: FFY ID: AIM: FFY LN) announced that the Boards of Directors of both companies have approved a revised agreement for the proposed combination of Chiquita Brands International Inc (NYSE:CQB) and Fyffes plc. Under the terms of the amended agreement yffes plc shareholders will now receive 0.1113 ChiquitaFyffes shares for each Fyffes share they hold and Chiquita Brands International Inc (NYSE:CQB) shareholders will receive one ChiquitaFyffes share for each Chiquita share that they hold upon completion of the Combination.

However, the plaintiff claims that the revised transaction would only value the Chiquita shares at $11.89 per share. The plaintiff also says that Under the new terms of the transaction, the Termination Fee increased from 1.0% of its equity value to 3.5% of its equity value, should Chiquita Brands International Inc accept a“Superior Proposal,” or negotiate with an unsolicited “Alternative Proposal.” And that this alleged onerous Termination Fee is a deal protection device that substantially reduces the possibility that Chiquita Brands International Inc would be sold to Cutrale-Safra, or any other third-party bidder, as any competing bidder would essentially be required to pay a naked premium for the right to provide Chiquita Brands International Inc’s stockholders with a superior offer.

Chiquita Brands International Inc reported that its annual Total Revenue declined from over $3.07 billion in 2012 to $3.05 billion in 2013 and that its respective Net Loss declined from $405.02 million to $15.81 million. Shares of Chiquita Brands International Inc (NYSE:CQB) grew from $4.80 per share in June 2012 to as high as $12.64 per share in April 2014.