Banana producer Chiquita said it would start takeover talks with Brazil's Cutrale and Safra Group after its shareholders voted against its proposed merger with Irish rival Fyffes.
"While we are convinced (Fyffes) would have been a strong merger partner, we will now go forward as competitors," Chiquita's President and CEO Edward Lonergan said in a statement.
Fyffes said that should Chiquita enter into a separate deal within nine months, Fyffes is entitled to a termination fee of 3.5% of the total closing value of the share capital of Chiquita the day before such an agreement.
Shares in Fyffes fell by 5.1% on the back of the news, ending the day on 94c.
Chiquita had said earlier today that it would only enter into talks with juice maker Cutrale and investment firm Safra if its shareholders rejected the proposed merger with Fyffes.
Cutrale-Safra raised its all-cash offer for Chiquita to $14.50 per share from $14 yesterday, valuing the company at about $682m.
Fyffes and Chiquita said recently that the implied value of their potential deal ranged from $15.46-$20.01 per share.
Proxy advisory firm Institutional Shareholder Services said yesterday that although it was reluctant to change its recommendation before the vote, Cutrale-Safra's revised offer might be "more compelling to some shareholders".
The firm had earlier recommended the merger with Fyffes.
Fyffes executive chairman David McCann said he was confident that Fyffes will remain at the forefront of the global produce industry.
"We will continue to focus on successfully developing our business for the benefit of all stakeholders. We extend our gratitude to the Chiquita team for their professionalism during the process and wish them well in the future," he added in a statement today.
"I want to thank David McCann and the entire Fyffes team for their efforts throughout this process. While we are convinced they would have been a strong merger partner, we will now go forward as competitors," commented Chiquita's President and CEO Edward F Lonergan after today's meeting.
