NEW YORK (TheStreet) -- Shares of Chiquita Brands International Inc. (CQB) are higher by 3.95% to $13.68 in mid-morning trading on Wednesday, after Brazil's Cutrale Group and Safra Group increased their joint offer to purchase the company to almost $658 million, Bloomberg reports.
The latest offer from the two companies of $14 per share is 7.7% more than their first, unsolicited offer of $13 a share, Bloomberg added.
Safra and Cutrale joined together to offer a bid for the banana and fresh produce distributor in order to stop the company's planned acquisition of Fyffes Plc., which would create the largest banana company in the world.
Institutional Investor Services Inc., a proxy advisor, said at the beginning of September that it believes Chiquita's investors should oppose the Fyffes deal in favor of the Cutrale-Safra buyout, as Cutrale controls a third of the $5 billion orange juice market and has global operations in soybeans, apples, peaches, and lemons, Bloomberg noted.
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, increase in stock price during the past year 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 0.8%. 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.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of 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