Yuanxi Zhang
Long/short equity, value, special situations

Chiquita Brands: The Deal With Fyffes Is Probably Dead; A Higher Offer Is Likely

Thesis

After Cutrale-Safra made an unsolicited offer to Chiquita Brands (NYSE:CQB) for $13.00 per share, the chance that Chiquita Brands closes the merger with Fyffes (FFY) is slim as the deal is unlikely to secure the requisite approval from Chiquita's shareholders. The Cutrale-Safra offer is undervalued compared with precedent transactions and the buyer group has not conducted due diligence on Chiquita Brands. We think Chiquita Brands is likely to be sold at $15 or above, so we recommend a speculative long position.

Background Information

On March 10th, 2014, Chiquita Brands announced that it will merge with Fyffes and relocate the headquarter of the combined company to Ireland. On August 11th, 2014, Cutrale-Safra made an unsolicited offer to Chiquita...

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