IRISH BANANA COMPANY Fyffes’ proposed merger with US powerhouse player Chiquita is in danger after a rival bid emerged.

The American banana company last night confirmed that it had received a unsolicited offer from Brazilian orange juice manufacturer Cutrale Group, which is backed by compatriot financier Safra Group.

A deal between Fyffes and Chiquita was announced in March, which would have seen the pair merge with a headquarters in Ireland.

However, analyst David Holohan of Merrion Stockbrokers is not optimistic that the deal will go through, with Chiquita’s head likely to be turned by the charms of the Brazilian outfit.

He said that Fyffes’ valuation, which took a nosedive on the news of the rival bid last night, would struggle to support the original split in the mooted joint venture, which would have seen the Irish company take a 49.3% shareholding.

“It’ll be very difficult for Fyffes. The combination of the two companies would have seen Fyffes take less than 50%. They have an excellent balance sheet but the companies’ valutations are moving in opposite directions.”

The proposed deal with Cutrale would also leave the corporate structure of Chiquita unchanged, something Holohan said would be attractive to the company.

He said that the deal would have been a good opportunity for Fyffes.

“There would have been exposure to North America, led by senior Fyffes managers, it would have been based out of here…it would have been a fantastic move and one that they would have devoted a lot of internal resources to.”

It’s clearly a setback, but the business is still a good one.

He said that Fyffes will be “somewhat bruised” but not crippled if, as expected, the deal is called off in favour of a link-up with Cutrale.

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