NEW YORK (The Deal) -- Shareholders of Chiquita Brands International (CQB) are getting conflicting advice from top advisory proxy firms ahead of Friday's vote on a planned merger with Ireland's Fyffes.
On Tuesday, Glass, Lewis & Co. recommended that Chiquita shareholders vote against the Fyffes deal, a day after Institutional Shareholder Services Inc. did a U-turn and advised its clients to support the revised agreement with Fyffes.
"Based on our review of the updated materials, we believe the board's case continues to leave more than a reasonable degree of doubt as to whether the revised Fyffes combination is the best option available to Chiquita investors," Glass Lewis said.
It added: "Under the present conditions, we believe the best option available to shareholders is to reject the current arrangement and provide maximum flexibility to the board to conduct a more circumspect analysis of the potentially superior alternatives available to Chiquita."
Rival Chiquita suitors Cutrale Group and Safra Group, both of Brazil, welcomed the recommendation and insisted that their sweetened $14-per-share bid offers shareholders a "superior and compelling alternative." Chiquita rejected the Brazilian bid last week.
Juicemaker Cutrale and investor Safra's $660 million offer aims to prevent Chiquita from joining forces with Fyffes to form the world's leading banana producer. Chiquita and Fyffes rejigged the terms of their accord last month to give Chiquita shareholders a larger chunk of the future ChiquitaFyffes than originally foreseen.
While ISS had originally lobbied against the Fyffes deal, it is now urging Chiquita shareholders to approve the transaction, and reject the Brazilian offer.
"While the Cutrale/Safra cash bid appears to offer relative certainty of value, it does not appear to offer a sufficient premium to the value of the Chiquita/Fyffes combination," ISS said on Monday.
Chiquita on Tuesday stepped up its lobbying efforts with a statement designed to "set the record straight" and correct what it called "inaccurate and misleading statements" from the Brazilian biddders. It reiterated that it views the Cutrale/Safra premium as too slim and accused the bid partners of distorting ISS' analysis to advance their own case.
"Chiquita's board of directors is solely focused on maximizing value for all Chiquita shareholders. In contrast, Cutrale/Safra appears only interested in acquiring Chiquita for the lowest possible price without adequately compensating Chiquita shareholders," said Chiquita president and CEO Ed Lonergan in the statement.
Noting Wednesday's advice from Glass, Lewis, he added that the "report fails to recognize the value of the Fyffes transaction and the improved terms negotiated by Chiquita's board."
The Chiquita-Fyffes combination already has the blessing of the European Commission, which granted conditional approval earlier this month.