Chiquita Bid Gets Broker Nod
The Age
Thursday July 20, 2006
INDEPENDENT broker Austock Securities has cautiously welcomed the $108 million takeover bid for fruit group Chiquita Brands South Pacific by Timbercorp and the Costa Group.
Austock analyst Craig Stranger said that, on current information, the 73? a share offer was a fair price, although shareholders should wait for additional detail. This would depend on the Chiquita board's review of the Bidder's Statement, due within two months."Chiquita's shareholders have become fatigued from continual downgrades, often due to agricultural events and sometimes mismanagement," he said. "The business is better suited to private hands in our opinion."Tradefresh, 65 per cent owned by the Costa Group and 35 per cent by the agribusiness investor Timbercorp, has made the off-market takeover offer.Geelong-based Costa Group, founded in 1888, manages, markets, distributes and exports Australian fresh produce. It is Chiquita's major shareholder with 26 per cent of the stock.Timbercorp is a managed investment company with interests in eucalypt plantations, olive trees, almonds and fruit. Chiquita produces mushrooms, blueberries, citrus fruit and bananas.Mr Stranger said Costa/Timbercorp were natural owners of Chiquita's assets. They had the funding and management to capitalise on Chiquita's leading positions in mushrooms, berries and farm management, he said. Mr Stranger said the assets were relatively cheap and the bid was in line with Austock's break-up valuation of 75? a share.A successful purchase would further entrench Timbercorp's position as a leader and operator at the forefront of agribusiness, he said. This would rebuff criticism from lobby groups, which claimed companies such as Timbercorp were purely financiers focused on short-term results.Timbercorp's shares finished 7? higher at $3.54. Chiquita was up marginally to 73.5?.LINK? www.timbercorp.com.au
© 2006 The Age