Canadian Manufacturing

Chiquita opens books to potential acquirers

The move could be protection against potential regulatory changes to tax inversion mergers similar to the Burger king-Tim Hortons deal

NEW YORK—Not even a month after flatly rejecting a takeover bid by two Brazilian companies, Chiquita 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 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 been depressed.

There has also been pushback on a national level against the type of deal Chiquita is trying to engineer with Fyffes.

The new company, called ChiquitaFyffes PLC, with a new headquarters in Ireland, 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 manoeuvr 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.

Another major U.S. corporation, Walgreen Co., ditched an inversion plan last month under rising political heat.

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, N.C., to Dublin, where Fyffes is based.

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