NEW YORK (TheStreet) -- Shares of Chiquita Brands International Inc. (CQB) are higher by 8.32% to $13.80 on heavy volume in early afternoon trading on Thursday, after the company confirmed it has received a second revised joint takeover offer of $14.50 per share, from Brazil's Cutrale Group and Safra Group.
Cutrale, an orange juice producer, and Safra, an investment firm, revised their definitive offer of $14 per share, one day before the meeting of Chiquita shareholders, in which they are supposed to vote on a proposed merger with Fyffes Plc. (FYFFF) , an Irish fruit and fresh produce company, Reuters reports.
The updated offer from Cutrale-Safra is an all cash deal valuing the company at almost $682 million, or 12 times its annual earnings before interest, tax, depreciation, and amortization, Reuters added.
Cutrale-Safra said the offer will remain open until Oct. 26, but added that it cannot guarantee that it would be extended, or that a new proposal will be made even if Chiquita's shareholder meeting were "adjourned, postponed, suspended, placed into recess, cancelled, or delayed," Reuters noted.
Chiquita said it will "carefully review and consider" the revised offer in order to make the best decision in the interest of the company and its shareholders.
Separately, TheStreet Ratings team rates CHIQUITA BRANDS INTL INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHIQUITA BRANDS INTL INC (CQB) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CQB's revenue growth has slightly outpaced the industry average of 0.9%. Since the same quarter one year prior, revenues slightly increased by 1.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Food Products industry. The net income has significantly decreased by 42.6% when compared to the same quarter one year ago, falling from $31.10 million to $17.84 million.
- Currently the debt-to-equity ratio of 1.69 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, CQB maintains a poor quick ratio of 0.91, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: CQB Ratings Report