Chiquita Brands International’s shareholders have rejected a long-planned merger with Fyffes Plc that would have created the world’s biggest banana company after the U.S. government revised tax rules that would affect the deal. Chiquita is now seeking a deal with Brazilian Grupo Cutrale and Safra Group who together have been trying to purchase Chiquita since August. Cutrale and Safra’s latest bid of $14.50 per share, valuing Chiquita at $742 million had been rejected as being too low. If Chiquita agrees to an alternative deal within nine months, Fyffes will be entitled to a termination fee of 3.5% of Chiquita’s market value. The deal to merge with Dublin-based Fyffes established in March was a ‘tax inversion’ deal structured to allow Chiquita Brands to re-incorporate in Ireland where tax rates are significantly lower. However, since March the U.S. government has re-issued new tax rulings that crack down on such deals making them less attractive. The latest bid for Chiquita from Cutrale and Safra will remain open until Sunday, October 26th.
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