NEW YORK, Aug. 28, 2014 /PRNewswire/ -- Cutrale-Safra today
announced the commencement of the mailing of their definitive proxy
statement filed with the SEC on August 28,
2014 (the "Cutrale-Safra Proxy Statement") in advance of the
Special Meeting of Shareholders of Chiquita Brands International,
Inc. (NYSE: CQB; "Chiquita") scheduled for September 17th.
The Cutrale-Safra Proxy Statement includes a letter to Chiquita
shareholders from Cutrale-Safra, a copy of which is provided below,
as well as detailed reasons why Chiquita shareholders should vote
AGAINST the Fyffes transaction proposal and vote FOR the
Cutrale-Safra negotiation proposal, using the GOLD Proxy Card.
Letter to Chiquita Shareholders from Cutrale-Safra
The following letter was included in the proxy materials mailed
to shareholders:
Cavendish Acquisition Corporation
Cavendish Global Limited
c/o 830 Bear Tavern Road
West Trenton, New Jersey 08628
August 28, 2014
Dear Chiquita Shareholder,
Affiliates of the Cutrale Group and the Safra Group
("Cutrale-Safra") have made a proposal to acquire at $13 cash per share all the outstanding shares of
Chiquita Brands International, Inc. ("Chiquita"). This proposal
(the "Cutrale-Safra proposal") is unquestionably superior to the
proposed transaction with Fyffes plc ("Fyffes") and provides
compelling value to Chiquita shareholders.
Cutrale-Safra is Asking for Your Support at the Upcoming
Chiquita Special Meeting of Shareholders so Chiquita Shareholders
Have the Opportunity to Realize Superior Value Offered by the
Cutrale-Safra Negotiation Proposal
In the proposed Fyffes combination, the Chiquita shareholders
receive no premium, no operational control and are exposed to
substantial risks inherent to that deal. We believe Chiquita
shareholders have already demonstrated their disappointment in that
deal by valuing the combined company at $10.06 per share, the closing sales price for
Chiquita shares the last trading day before the announcement of the
Cutrale-Safra proposal. This $10.06
per share price is actually a 7% discount to the unaffected price
of Chiquita shares prior to the announcement of the proposed Fyffes
combination, which means the Chiquita shareholders are valuing the
combined company even lower than Chiquita on a standalone
basis.
On the other hand, our all-cash proposal values Chiquita at
$13 per share and represents an
attractive premium of 29.2% to the $10.06 per share price. This highly compelling
premium exceeds the median premium of 23.9% paid in comparable
public precedent transactions. At a 11.8x multiple of Chiquita's
reported adjusted EBITDA for the last 12 months ended June 30, 2014, the Cutrale-Safra proposal
represents the highest comparable transaction multiple for an
acquisition of this scale in the fresh produce sector.
Without so much as reaching out to us on our highly superior
proposal, the Chiquita Board of Directors (the "Chiquita
Board") simply rejected the Cutrale-Safra proposal as
"inadequate, uncertain and not in the best interests of Chiquita
shareholders". As a consequence, Cutrale-Safra is directly
soliciting your votes to ensure that you will be able to preserve
the option to realize unquestionably superior value on your
Chiquita shares without risking the proposed Fyffes
combination.
In order to preserve your optionality, you must VOTE "FOR"
the Cutrale-Safra negotiation proposal at the Special Meeting of
Shareholders on September 17, 2014,
and you must VOTE "AGAINST" the proposed Chiquita-Fyffes
transaction
Cutrale–Safra is Offering Chiquita Shareholders a Riskless Path
to Realize Value if the Chiquita Board Engages with
Cutrale-Safra
- There is NO RISK, only upside, for Chiquita shareholders in the
Chiquita Board engaging with Cutrale-Safra.
- Vote AGAINST the Fyffes transaction proposal and FOR the
Cutrale-Safra negotiation proposal so that Chiquita can adjourn the
Special Meeting in compliance with the Chiquita-Fyffes transaction
agreement.
- If FOR ANY REASON a deal is not concluded between the Chiquita
Board and Cutrale-Safra during the adjournment period, Chiquita
shareholders can still proceed with the proposed Fyffes
combination.
- Under the Chiquita-Fyffes transaction agreement, Fyffes cannot
walk away during the adjournment period so long as Chiquita
continues to honor its obligations (which it can do while
negotiating with us).
VOTE THE GOLD PROXY CARD TO HAVE THE OPPORTUNITY
TO REALIZE UNQUESTIONABLY SUPERIOR VALUE FOR YOUR CHIQUITA
SHARES
Vote AGAINST the Fyffes transaction proposal and the related
Fyffes proposals
Vote FOR the Cutrale-Safra negotiation proposal
What Does Cutrale-Safra Plan to Do at the Special
Meeting?
If Cutrale-Safra receives sufficient proxies to vote AGAINST the
proposed Fyffes combination to cause the vote for the proposed
Fyffes combination to fail at the September
17 Special Meeting, and if the Chiquita Board has publicly
announced that it will be engaging with Cutrale-Safra in
discussions, Cutrale-Safra will move to adjourn the Special Meeting
prior to any vote being taken on the proposed Chiquita-Fyffes
transaction. In our definitive proxy statement filed August 28, 2014, we refer to this as the
"Cutrale-Safra negotiation proposal".
It is important to Cutrale-Safra that the Chiquita Board engages
or publicly announces its intent to engage with Cutrale-Safra with
respect to the Cutrale-Safra proposal on or prior to the date of
the Special Meeting. Cutrale-Safra will not make a motion to
adjourn the Special Meeting if the Chiquita Board has not otherwise
signaled its willingness to engage with us. In addition to voting
its proxies as described above, Chiquita shareholders should urge
the Chiquita Board to engage with Cutrale-Safra so that the Special
Meeting can be adjourned without risking the proposed Fyffes
combination.
Chiquita Shareholders Have Every Reason to be Concerned that
the Proposed Fyffes Combination Favors Fyffes Shareholders at the
Expense of Chiquita Shareholders
Here are the facts:
- Chiquita paid Fyffes shareholders a significant economic
premium AND ceded operating control of the combined company to
Fyffes management:
- The proposed Fyffes combination offers no premium to Chiquita
shareholders, but values Fyffes shares at a premium of up to
45-67%.
- Fyffes management is filling the key management positions in
the combined company.
- Shareholders seem to recognize that Fyffes got the better
bargain based on investment market reaction to the announcement of
the proposed Fyffes combination:
- Since March 10, 2014, the date of
the announcement of the proposed Fyffes combination and up until
the time of the Cutrale-Safra proposal announcement, Chiquita's
stock price has declined by 7.2%, as compared to closest publicly
traded comparable Fresh Del Monte's stock price which has increased
13.5% during the same time period.
- Fyffes' stock price, on the other hand, appreciated by 21%
during the same time period.
- The Chiquita Board ran a faulty sale process that did not
result in maximum long-term value for Chiquita shareholders.
- By its own admission in its definitive proxy statement,
Chiquita had been unsuccessfully looking for a buyer for many
years.
- Even though Cutrale is a natural owner of Chiquita, the
Chiquita Board never contacted either Cutrale or Safra during its
search for a potential strategic buyer.
- The Cutrale-Safra proposal is evidence that a premium is
available for the Chiquita shareholders had the Chiquita Board run
a better sales process.
Chiquita Shareholders Have Suffered from the Chiquita Board's
Record of Value Destruction and Poor Strategic Decisions. Why
Would It Be Any Different This Time?
Consider the following:
- Chiquita's stock price has underperformed relative to peers in
the last 10 years. While Chiquita's stock price declined by 47%
during the ten years ended August 8,
2014, total shareholder return (inclusive of dividends) only
decreased by 17% for Dole Foods and has actually increased by 39%
for Fresh Del Monte.
- The 2005 Fresh Express acquisition failed under Chiquita's
ownership.
- Fresh Express was acquired for $855
million in 2005 and at the time, former Chiquita CEO
Fernando Aguirre told shareholders
it was "the most important strategic and transformation move the
company has made in decades." Since then, Chiquita has taken over
$555 million of impairment charges
related to Fresh Express.
- Fresh Express' sales and profits have declined meaningfully and
the operating income margins have been disappointing.
- Chiquita has consistently missed the Wall Street consensus
earnings estimates after putting out overly optimistic earnings
guidance.
- Chiquita's actual earnings were 31%, 54% and 27% below
consensus estimates in 2011, 2012 and 2013, respectively.
The August 27, 2014
Announcements and Investor Presentation by Chiquita and Fyffes Cast
Further Doubt on the Judgment and Credibility of the Chiquita
Board
Shareholders should find it curious that Chiquita and Fyffes
have suddenly discovered an additional $20
million of alleged synergies for the proposed Fyffes
combination, as well as additional cost savings of $14-15 million for Chiquita, following
receipt of the Cutrale-Safra proposal and just weeks before the
Special Meeting. Shareholders should know well that Chiquita has an
established track record of setting overly rosy expectations that
are not borne out. Moreover, even if it were in fact true that
Chiquita and Fyffes had identified more areas for potential
synergies, this does not mean that the integration risks the
proposed Fyffes combination faces have diminished. Chiquita admits
as the first risk factor in its definitive proxy statement that
combining two independent business is a complex, costly and
time-consuming process which, if implemented ineffectively, would
preclude realization of the full benefits expected by Chiquita and
Fyffes. Why, given Chiquita's record, should shareholders have
any confidence that Chiquita and Fyffes would be able to
successfully integrate the two businesses so that they are able to
achieve the full $40 million of
synergies initially reported, much less the additional $20 million they appear to have unearthed after
many months?
Cutrale-Safra found most of Chiquita's investor presentation to
be a mere reiteration of existing information that the market had
already absorbed when the stock was trading at $10.06 per share. In fact, we found some of the
new information and data points contained in the Investor
Presentation not to be very credible. We have filed a short
presentation with the SEC today that focuses on the statements in
the Chiquita Investor Presentation that we found were misleading
for Chiquita shareholders.
Chiquita Shareholders Should Want the Chiquita Board to
Engage in Discussions with Cutrale-Safra about its $13 Per Share All Cash Proposal
Not only does the Cutrale-Safra proposal offer cash certainty
and a compelling premium, we are confident that the Cutrale-Safra
proposal will constitute a "Chiquita Superior Proposal" under the
Chiquita-Fyffes transaction agreement. The Cutrale Group, one of
the most highly regarded agribusiness and juice companies in the
world, and the Safra Group, with its strong track record of
successful investments in major global industries, are the natural
owners of Chiquita, providing highly compelling strategic rationale
and expertise. In addition, Cutrale-Safra is confident that, with
the Chiquita Board's timely engagement, the Cutrale-Safra proposed
transaction can be closed before the end of the year, without the
execution risk and uncertainty inherent in the Fyffes
combination.
VOTE YOUR GOLD PROXY CARD TO HAVE THE
OPPORTUNITY TO REALIZE UNQUESTIONABLY SUPERIOR VALUE WITHOUT
RISKING THE PROPOSED FYFFES COMBINATION
Vote AGAINST the Fyffes transaction proposal
and the related Fyffes proposals
Vote FOR the Cutrale-Safra negotiation
proposal
URGE the Chiquita Board to engage with
Cutrale-Safra
We thank you for your support.
Sincerely,
Cavendish Acquisition Corporation and Cavendish Global
Limited
Mailing of the Cutrale-Safra Proxy Statement has commenced and
hard copies will arrive in shareholders' mailboxes in due
course.
Voting Instructions
VOTE "AGAINST" THE FYFFES TRANSACTION PROPOSAL AND THE
RELATED FYFFES PROPOSALS AND VOTE "FOR" THE CUTRALE-SAFRA
NEGOTIATION PROPOSAL BY TELEPHONE OR INTERNET OR BY SIGNING, DATING
AND RETURNING THE ENCLOSED GOLD PROXY CARD IN THE POSTAGE-PAID
ENVELOPE PROVIDED. NO POSTAGE IS NECESSARY IF YOUR PROXY CARD
IS MAILED IN THE UNITED STATES. WE URGE YOU TO VOTE BY
TELEPHONE OR INTERNET OR BY SIGNING, DATING AND RETURNING THE
GOLD PROXY CARD ENCLOSED IN THE CUTRALE-SAFRA PROXY
STATEMENT.
Media Contact:
Stef
Goodsell / Madisen Obiedo
Kekst and Company
(212) 521-4878/4866
Stef-Goodsell@kekst.com / Madisen-Obiedo@kekst.com
Investor Contact:
Scott
Winter / Arthur Crozier
Innisfree M&A Incorporated
(212) 750-5833
Cavendish Global Limited and Cavendish Acquisition Corporation,
which are jointly owned by an affiliate of the Cutrale Group,
Burlingtown UK LTD ("Burlingtown"), and an affiliate of the Safra
Group, Erichton Investments Ltd. ("Erichton" and, together with
Burlingtown and Cavendish, "Cutrale-Safra"), their respective
directors, executive officers and certain employees, and
Burlingtown and Erichton, may be deemed, under rules of the
Securities and Exchange Commission ("SEC"), to be participants in
the solicitation of proxies from Chiquita shareholders in
connection with Chiquita's Special Meeting of Shareholders.
Information about the interests in Chiquita of Cutrale-Safra and
their respective directors, executive officers and employees are
set forth in a definitive proxy statement that was filed with the
SEC on August 28, 2014, as it may be
amended from time to time (the "Cutrale-Safra Proxy").
Investors are urged to read the Cutrale-Safra Proxy which is
available now, and any other relevant documents filed with the SEC
when they become available, because they contain (or will contain)
important information. The Cutrale-Safra Proxy, and any other
documents filed by Cutrale-Safra with the SEC, may be obtained free
of charge at the SEC web site at www.sec.gov. The Cutrale-Safra
Proxy and such other documents may also be obtained free of charge
by contacting Innisfree at: (212) 750-5833 or 501 Madison Avenue,
20th Floor, New York, New York
10022.
About Cutrale Group
The Cutrale Group is one of the most highly regarded
agribusiness and juice companies in the world. It is one of the
world's leading orange juice processors for frozen concentrated
orange juice and not-from-concentrate fresh juices, accounting for
over one-third of the $5 billion
orange juice market. The Cutrale Group's global business operations
include oranges, apples, peaches, lemons and soybeans. Cutrale
Group operations have a vast network and knowhow of farms,
processing, technology, sourcing, distribution, logistics, and
marketing of juices and fruits.
About Safra Group
The Safra Group is an international group of companies and
assets controlled by Joseph Safra.
The Safra Group, with assets under management of over $200 billion and aggregate stockholder equity of
approximately $15.3 billion, operates
banks and invests in other businesses across North and South America, Europe, the Middle
East and Asia. Throughout
these markets, Safra has deep, long-term relationships with major
market participants, enabling it to greatly enhance the value of
the competitive position of the businesses in which it invests.
SOURCE Cutrale Group and Safra Group