More posturing by Cutrale. I have to hand it to them. They are abrasive and mouthy. But, they have managed to temporarily stall the Fyffes deal. It's clear that Fyffes very much wants a merger to go through, and CQB probably does, as well, albeit for different reasons. Cutrale understands this and that's why it's imperative that they better their offer and also top the current market price (which they conveniently fail to mention in their communications). If they offer $15 or better, they'll get support from ISS and Glass Lewis. Anything short of that and they risk getting ushered out. I still expect a revised offer tomorrow, but it could get delayed until next week.
Expect either a joint announcement, or more likely one from Cutrale stating that based on further due diligence, they are increasing their offer for CQB. This could come as early as today, after the markets close. It should happen by Friday at latest. They are trying very hard to avoid leaks, as it becomes more difficult to do a deal if the shares rise over the offer price. I am expecting something near $15, as that is approximately the consensus "minimum" fair value, and at this juncture, a white knight seems less likely. If they offered $16+, CQB board would make a joint announcement acknowledging it to be the better option over Fyffes. Cutrale may decide to spend the extra $40 million to grease the skids, but don't count on it.
Cutrale and Safra have become whiners at this point. If they want to buy the company, they need to step up and look at the boojs, then make a reasonable offer. While ISS and others support that CQB should entertain an offer, nobody believes that $13 is a fair one. Volume was high today and yesterday. There are several ways to interpret this. The pessimist says that an institutional holder is tired of waiting. The optimist says that a white night is accumulating, in which case there will be an SEC filing this week. The neutral version is that Cutrale is buying shares on the open market. If they can buy a chunk for under 14, then paying 15 for the remainder won't cost as much, and they will have the votes to help close the deal. Really hard to say at this point, but I'm sticking it out. Clarity will arrive within a matter of days.
Here we go. Could be a bluff as Cutrate-Safra saying still not enough time to give a proper bid
"Chiquita Brands International Inc. has invited Brazilian orange-juice producer Cutrale Group and investment firm Safra Group to make their best and final offer for the company as it delayed the shareholder vote on its deal with Irish fruit grower Fyffes PLC.
The banana producer delayed the meeting to Oct. 3 from Sept. 17.
But the Cutrale-Safra investment group called Chiquita's offer a "blatant attempt to frustrate Chiquita shareholders" and sway the board's vote in favor of the Fyffes deal. "
There more to this article but I couldn't get it all. Check it out on CQB headline news. Rest of article seems to be just blabbering and some saber rattling. Check it out for yourself and be sue to give me your thoughts on this,
Totally agree the Cutrale / Safra offer is extremely inadequate
Cutrale / Safra and the media machine trying to rob CQB and its shareholders ..IMHO
I think they will, too. But, they are waiting for more clock to run out. And, they be gauging whether shareholders will possibly vote down the merger. Most shares are held by institutions. So, they can wait until the final moment, and probably will. I'm guessing $15, and if not, the Fyffes deal goes through.
All kinds of letters coming out pushed us back to the 13's some. I think Brazil sweetens the offer.
Thanx for ur input. It gave me the confidence to add to my "speculative" position of CBQ. Looks like the 13's are gone. This good be fun.
My educated guess is that Cutrale will ultimately offer at least $15. However, another interested party may emerge. I have a hard time seeing anything under $15 because the Chiquita-Fyffes combo is worth at least that on its own if you look at projections. If there is a bidding war, we could expect $16 to $20. By the way, if you look at enterprise value (including debt), Cutrale only needs to improve their offer by roughly 10% to reach $15.50. For that group, the offer is chump change, and they can easily afford and justify up to $17. CQB would favor a competing offer as Cutrale has a negative reputation. So, I'm also guessing that the BOD is actively seeking a white knight. Proxy date is only a few weeks away, so expect something to happen any day.
Any thoughts on what the buyout price will be? Bidding wars? Might be good for a few dollars on buyout price play. Bought some at $13.20. Thinking of buying more not for the company or its merits; only as buyout play. Hoping for maybe $15.00.
There is little doubt that the board of directors is being given advice that it is their fiduciary duty to seek other offers. The $13 /share offer may be too low, but is a decent level from which to start the auction process. This despite, if you bought on the earnings miss two years ago, you're already up 150%.
Clearly other strategics from the food industry will already be analyzing the overhead cost savings since only the operational costs will continue post deal. The Brazilians won't have this cost savings benefit in their valuation. However, we may need to be deducted for the payment of break-up fees made to the bridesmaid.
So while the typical best advice is to sell on an announcement, keep holding this one...relax and enjoy the auction. CQB is going higher!