NEW YORK (TheStreet) -- Shares of Chiquita Brands International Inc. (CQB) are rising 30.32% to $13.11 on heavy volume in mid-afternoon trading on Monday, following an offer from The Cutrale Group and Safra Group to purchase all outstanding shares of Chiquita’s stock for $13 per share, or $610.5 million in cash.
The Cutrale Group, an agribusiness and juice company, and Safra Group, a global investment firm, said the proposal represents a 29% premium to Chiquita’s August 8 closing share price of $10.06.
Chiquita is an international marketer and distributor of bananas and other fresh produce.
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Earlier today the company provided a “Rule 2.10” announcement stating Chiquita confirmed its issued share capital comprised of 46,967,899 common shares, as of August 8.
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. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, 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:
- CHIQUITA BRANDS INTL INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CHIQUITA BRANDS INTL INC continued to lose money by earning -$0.34 versus -$8.71 in the prior year. This year, the market expects an improvement in earnings ($0.05 versus -$0.34).
- CQB, with its decline in revenue, slightly underperformed the industry average of 3.0%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Food Products industry and the overall market, CHIQUITA BRANDS INTL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Currently the debt-to-equity ratio of 1.82 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 0.84, which illustrates the inability to avoid short-term cash problems.
- 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 1135.0% when compared to the same quarter one year ago, falling from $2.38 million to -$24.60 million.
- You can view the full analysis from the report here: CQB Ratings Report