Japanese firm tables €751m cash offer for Fyffes

Fruit is big business for the Irish firm...

It’s been announced this morning that the giant Japanese trading company, Sumitomo Corporation has made a cash offer for the Irish-based banana and fruit distribution company Fyffes, it values Fyffes at just over €751m.

The offer price of €2.23 per share is at a premium to Fyffes closing share price of €1.50 last night and a premium of nearly 40% to the company’s highest ever share price of €1.62 last April.

Needless to say, the offer has been recommended by the board of Fyffes.
Fyffes, long associated with the McCann family of Dundalk and chaired by David McCann, is a leading international grower, importer and distributor of fruit, particularly bananas, and more recently mushrooms. It has annual sales in excess of €1.2bn and operations on four continents.

Balkan Investments, the McCann family vehicle, own just under 12% of Fyffes - which the deal values at some €90m in cash.

Sumitomo, is a publicly-traded conglomerate comprising more than 800 separate trading companies and employing 65,000 people. It has $8bn in cash on its balance sheet and is the leading trader of bananas in Asia and the owner of extensive banana plantations in the Phillipines.

Commenting on the acquisition, Hirohiko Imura, Representative Director, Managing Executive Officer of Sumitomo, said: "Sumitomo Corporation has long admired Fyffes for its outstanding track record and market leading position, and we are delighted that the Fyffes Directors have unanimously agreed to recommend our offer to shareholders.

"We believe that our offer represents a great reward for Fyffes’ shareholders. We are grateful that the McCann family has provided an irrevocable commitment of support and is entrusting us to continue with them the rich Fyffes heritage."

David McCann, Chairman of Fyffes said: "We believe this transaction represents a compelling proposition for our shareholders and crystallises the substantial value created in recent years through the various strategic developments and the strong operating performance of our Group.

"Our employees, customers, suppliers and joint venture partners will benefit from Fyffes being part of an enlarged group with greater scale, reach and resources to broaden and accelerate delivery of Fyffes’ strategic objectives."

 The acquisition represents a premium of approximately:

  • 49% to Fyffes’ closing share price of €1.50 on 8 December 2016 (being the last practicable date prior to the publication of this Announcement)
  • 53% to Fyffes’ volume weighted average share price of approximately €1.46 over the 30 trading day period ending 8 December 2016
  • 52% to Fyffes’ volume weighted average share price of approximately €1.47 over the 90 trading day period ending 8 December 2016
  • 37% to Fyffes’ all-time high share price of €1.62, which occurred on 22 April 2016.

In addition, Fyffes Shareholders will be paid a final dividend in respect of calendar year 2016 by Fyffes of €0.02 per share in cash, bringing the total amount to be received by Fyffes shareholders to €2.25 per Fyffes Ordinary Share in cash.

The final dividend will be paid to Fyffes Shareholders on the earlier of the Effective Date or 1 May 2017.

The massive cash deal is subject to approval from Fyffes shareholders and regulatory clearance.