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Shareholders delay vote as EU backs Fyffes merger


David McCann, Executive Chairman of Fyffes

David McCann, Executive Chairman of Fyffes

David McCann, Executive Chairman of Fyffes

Fyffes shareholders voted to postpone a ballot on merging with Chiquita yesterday.

In an extraordinary general meeting, lasting just five minutes, stockholders agreed to hold the vote on October 28, four days after Chiquita shareholders decide if they'll tie-up with the Irish firm.

Chairman David McCann remained tight-lipped when asked how confident he is that the proposed merger with Chiquita will go ahead.

"I'll have to keep my counsel on that until we see what happens, we have a so-called 'jumper' as the expression goes in the US, and we'll have to see what he does, if anything," Mr McCann told the Irish Independent.

The "jumper" is the Cutrale-Safra group, with which Fyffes is competing for the affection of Chiquita shareholders.

"They're conducting a due diligence as we understand it, we may hear from them again, we may not," Mr McCann said.

"They may stick with the current proposal, they may do something different, we're all waiting to see."

Fyffes recently agreed to take a smaller piece of the proposed new company in an attempt to fend off its rival, which has offered Chiquita shareholders $13 in cash per share.

Cutrale-Safra says shares in the Fyffes-Chiquita tie-up would be worth $11.82 apiece.

Separately the European Commission has given the green light to the proposed merger between Chiquita and Fyffes, subject to conditions.

"We had got advice at the outset that we would get a clearance - and I think in some way the market didn't necessarily take that, and that's normal," Mr McCann said in welcoming the news yesterday.

The Commission said the companies would have to avoid exclusivity deals with shipping companies - and refrain from offering incentives to shippers to stop carrying rival fruit - in return for its approval of the deal.

The companies pledged to ditch exclusivity deals with shippers for 10 years in return for the Commission's approval.

The Commission's investigation into the merger found that despite the high market shares of Chiquita and Fyffes - particularly in Belgium, Finland, Ireland, Latvia, The Netherlands, Sweden and the UK - wholesale and retail customers would still have a significant number of other potential banana suppliers to choose from.

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The tie-up between US firm Chiquita and Irish company Fyffes would create the world's largest banana group.

Chiquita's board is encouraging shareholders to accept the deal with Fyffes.

Chiquita chief executive David Lonergan has recently said the deal would be "a natural strategic partnership that brings together two complementary companies to create a combined company that is better positioned to succeed in a highly competitive marketplace".

Mr McCann previously described the deal as "strategic and compelling".

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