Banana giant Chiquita has rejected the takeover bid by Brazil's Cutrale and Safra groups, calling their offer "inadequate" and sticking to its plan to merge with Irish fruit firm Fyffes.
The board of Chiquita turned down the $13 a share, $611m cash offer for all of its stock made on Monday by Cutrale, a global power in fruit juices, and Safra, the wealthy Brazilian investment bank.
The offer "is inadequate and not in the best interests of Chiquita shareholders," the board said.
"Having made such a determination, Chiquita has determined not to furnish information to, and have discussions and negotiations with, the Cutrale Group and the Safra Group at this time," it added.
The board said it would continue to back the merger with Fyffes, which would create the world's largest banana purveyor, with $4.6 billion in annual revenues.
Chiquita's rejection of the offer, which threatened to scupper the merger, is good news for Fyffes which had seen its shares fall sharply when Cutrale made the surprise approach.
The Chiquita-Fyfees all-stock deal, announced in March, would allow Chiquita to avoid higher US taxes by relocating its statutory headquarters to Ireland, a so-called tax inversion.
Chiquita shareholders are due to meet and vote on the merger in a special meeting on September 17.
But the board's rejection appeared to leave the door open for a better offer from the two Brazilian suitors.
The two companies had argued that theirs was a better deal for shareholders, who have sold off Chiquita shares in the wake of strong comments by US President Barack Obama and other top officials against tax inversions like that which Chiquita is planning.
Down about 17% since the Fyffes merger was announced, Chiquita shares jumped over 30% on Monday on the Cutrale-Safra offer. Since then they have traded above $13, suggesting investors expect a better offer.