Chiquita and Stokely Plan Merger
The proposed merger will result in Stokely shareholders receiving $1.00 per Stokely share in the form of Chiquita common stock. The Chiquita stock issuable to Stokely shareholders will be valued at the average closing price per Chiquita share on the New York Stock Exchange for the 15 trading days prior to the closing of the transaction. In the proposed merger, a significant amount of Stokely's long-term debt will be exchanged for Chiquita common shares. Completion of the transaction is subject to obtaining necessary regulatory and Stokely shareholder approvals and various other closing conditions.
"We plan to combine Stokely's first-class processing facilities, experienced work force and excellent customer base with our Friday Canning subsidiary's position as the premier domestic private label canned vegetable supplier," said Anthony D. Battaglia, President of Chiquita's Diversified Foods Group. "This combination will enable us to better serve our customers with high-quality private label canned vegetables."
Consistent with its previous statements about the need for consolidation and structural change in the vegetable processing industry, Stokely had retained Donaldson, Lufkin & Jenrette Securities Corporation to assist its Board of Directors in a review of all strategic alternatives, including sale of the Company. Commenting on the proposed merger, Stokely's President and Chief Executive Officer Stephen W. Theobald, stated: "Despite several attempts to restructure our operations, the combination of high leverage and the difficult market conditions we face has continued to erode the value of the Company and negatively impact our liquidity position. Our ability to compete effectively in the marketplace has been undermined as a result. After a thorough review, our Board of Directors concluded that this merger, which will give current Stokely shareholders a stake in a larger, more diversified food company, represents the most attractive strategic alternative available. Additionally, we believe Stokely's customers and other constituencies will benefit because Chiquita is a committed and growing player in the processed vegetable category and knows how to deliver value to customers in both private label and brand channels of distribution."
The proposed merger, which has been unanimously approved by both Stokely's and Chiquita's Boards of Directors, is subject to approval by Stokely's shareholders. Stokely's common stock is traded on the Nasdaq National Market System (STKY), where its last trade on September 17, 1997, was $1-9/16 per share. Approximately 11.4 million Stokely shares are outstanding. The transaction is expected to close in early January 1998. Donaldson, Lufkin & Jenrette has rendered its opinion to Stokely's Board of Directors that the consideration to be paid is fair to Stokely's shareholders from a financial point of view.
Chiquita will file a registration statement (which will include Stokely's proxy statement for a shareholders meeting at which the proposed merger will be considered) with the Securities and Exchange Commission covering the Chiquita shares to be issued in connection with the proposed merger. Stokely anticipates that the shareholders meeting to vote on the proposed merger will be held in early January 1998.
Stokely USA, Inc. is a major domestic producer of canned vegetables. The Company processes, markets and sells a broad range of vegetables under customer private labels and under the Stokely's Finest label and the Stokely's Gold label and other brand labels through the retail, food service and industrial distribution channels. Headquartered in Oconomowoc, Wisconsin, Stokely operates seven processing facilities in the Midwest.
Chiquita is a leading international marketer, producer and distributor of bananas and other quality fresh and processed food products. Its Friday Canning operation, headquartered in New Richmond, Wisconsin, operates eight production facilities in Wisconsin and a joint venture in China and exports its private label canned vegetables to more than 40 countries.
This press release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the companies expect, believe or anticipate will or may occur in the future, are forward-looking statements. These statements are based on certain assumptions and analyses made by the companies in light of their experience and perception of historical trends, current conditions, expected future developments and other factors they believe are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the companies. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from the projections in the forward-looking statements.
SOURCE Chiquita Brands International, Inc.
/CONTACT: Joseph W. Hagin of Chiquita Brands International, 513-784-8866; or Stephen W. Theobald of Stokely USA, 414-569-1800/
CO: Chiquita Brands International, Inc.; Stokely USA, Inc. ST: Ohio, Wisconsin IN: FOD SU: TNM
BG-LA -- CLTH005 -- 7371 09/18/97 08:50 EDT http://www.prnewswire.com
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|Date:||Sep 18, 1997|
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