Investor Group Is Invited to Possible Auction of Chiquita

A group of investors in Chiquita Brands International Inc. on Monday said the parent of the world’s top banana producer has invited the group to participate in a possible auction for the company.

American Financial Group Inc., which holds about 40% of Chiquita, recently told the investor group, Consolidated Fruit Corp., that the banana firm “may consider initiating an auction process that might result in a sale of the issuer.”

If Cincinnati-based Chiquita did go forward with an auction, “CFC was invited to participate in such a process,” a filing with the Securities and Exchange Commission said.

The investor group said it did not know if the company is actually going to initiate an auction process or the timing or scope of such an auction.

Chiquita President and Chief Operating Officer Steve Warshaw, in a written statement, did not confirm or deny that the company was considering an auction.

He said that neither the company nor AFG are “engaged in an auction process with respect to Chiquita securities” and the company will “always welcome interest from Chiquita investors.”

The investor group, a company designed solely to hold Chiquita common stock, said it has in the past approached company officials, its financial advisors at American Financial and the Carl Lindner family, which runs both AFG and Chiquita, to discuss ways of boosting stockholder value.

While the investor group was prepared to discuss possibilities such as an acquisition, business combination or joint venture for Chiquita, “such discussions have not proceeded past a very preliminary stage,” the CFC filing said.

The investors who make up CFC, Panama-based Banistmo Capital Market Group Inc. and British Virgin Islands-based Daza Corp., hold a combined 6.6% of Chiquita, the filing said.

Earlier this month, Chiquita said its fourth-quarter loss would be wider than expected because of lower prices in Europe. In September, the company said it would cut about 15% of its work force in a move to save $15 million to $20 million a year.

A trade agreement between the U.S. and the European Union prompted the EU to boost the number of banana-import licenses granted to Latin American nations earlier this year. That caused a surplus that cut prices and squeezed profit margins, hurting Chiquita.

On the New York Stock Exchange, Chiquita shares closed up 19 cents at $4.38. That’s down from a 52-week high of $12 a share.

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Bloomberg News was used in compiling this report.