Chiquita Sends Letter to Holders

Chiquita Brands International, Inc.

("Chiquita") today will be mailing a letter to its shareholders which highlights key parts of a presentation the Company filed with the U.S. Securities and Exchange Commission ("SEC") regarding Chiquita's proposed merger with Fyffes plc ("Fyffes") and the upcoming special meeting of Chiquita shareholders to vote on the proposed merger. Chiquita's Board of Directors unanimously recommends that shareholders vote "FOR" the proposed transaction with Fyffes. The Board firmly believes that the unsolicited offer from the Cutrale Group and the Safra Group ("Cutrale / Safra") announced on August 11, 2014, to acquire all of the outstanding stock of Chiquita for $13.00 per share in cash, is inadequate and not in the best interests of Chiquita shareholders. The Board determined that, at this time, ChiquitaFyffes is the best alternative for Chiquita shareholders and that engaging in discussions in response to an inadequate and highly conditional offer is unlikely to lead to a superior proposal. The full text of the letter is below: August 27, 2014 Dear Fellow Chiquita Shareholder, We are writing to you today regarding Chiquita's upcoming Special Meeting of Shareholders, which will be held September 17, 2014. At this meeting, you will be asked to make an important decision regarding the future of your Company by voting on the pending proposed merger with Fyffes, which would create a global banana and other fresh produce company with approximately $4.2 billion in annual revenues.^1 In connection with this meeting, Chiquita has filed a presentation with the U.S. Securities and Exchange Commission ("SEC") that details the many reasons why your Board of Directors unanimously recommends that Chiquita shareholders vote "FOR" the proposed transaction with Fyffes. Chiquita has a strong, capable, and experienced Board that understands its fiduciary duties and is committed to, and focused on, enhancing shareholder value. Over the last two years, the Board has broadened its management, initiated and presided over a significant and successful shift in business strategy, and has also consistently and thoroughly reviewed value-maximizing opportunities, and in so doing unanimously determined that a combination with Fyffes is in the best interest of Chiquita shareholders. Highlights of the presentation are outlined below. ^1 Figure represents pro-forma combined 2013 revenue (excluding share of revenue of Fyffes joint ventures of $326 million) and is not a projection of how the combined group will trade. CHIQUITA BOARD STRONGLY BELIEVES IN STRATEGIC MERITS AND VALUE PROVIDED BY PROPOSED TRANSACTION WITH FYFFES The Chiquita Board has unanimously reaffirmed its recommendation that Chiquita shareholders vote to approve the definitive merger agreement between Chiquita and Fyffes. The Chiquita Board has studied numerous alternatives over the last few years and believes that the Chiquita and Fyffes combination is the most realistic and compelling. The combination with Fyffes accelerates Chiquita's "Return to the Core" strategy and should enable Chiquita to achieve higher, more predictable cash flow and to immediately deleverage, further improving the Company's financial profile. Benefits of the transaction include: * Combining two strong companies with complementary skills, a recognized portfolio of brands and global capabilities: The Chiquita and Fyffes combination would create a leading global produce company with the #1 position in bananas and a significant presence in packaged salads, melons and pineapples. The combination unites U.S. and European platforms and creates a more diverse company with a more stable end market and risk-improved sourcing portfolio.   * Highly complementary tropical fruit businesses offer significant and achievable potential cost synergies: Since the announcement on March 10, 2014, Chiquita and Fyffes have identified an additional $20 million of synergies for a total of at least $60 million in annualized cost synergies by the end of 2016.^2 The updated synergy estimates reflect additional information which has become available regarding optimization of sourcing and shipping logistics, as well as the output of the information technology integration planning work stream that was established after the proposed Combination was first announced. Importantly, these are synergies that could only be achieved through a strategic combination.   * Successful operators with proven track-record: Chiquita and Fyffes have deep benches of talent at the senior management level, with common management mentality regarding success in the banana industry and operational experience across key functions. By joining forces, Chiquita and Fyffes will be able to leverage the combined expertise of two management teams with highly complementary skills and views on cost efficiency and industry dynamics.   * Generating increased financial flexibility and a more efficient capital structure: The combination has the capacity to generate significant free cash flow and a combined 2014E pro forma EBITDA of $252-$272 million for ChiquitaFyffes, including estimated synergies.^^3 In addition, the Fyffes transaction enables immediate deleveraging, as Chiquita's net debt to EBITDA ratio in 2013 was 4.9x, whereas pro forma with synergies, the 2013 net debt to EBITDA ratio for ChiquitaFyffes would have been 2.5x. ^2 There are various material assumptions underlying the synergies estimate which may result in the synergies being materially greater or less than estimated. The estimates should therefore be read in conjunction with the statement of bases and assumptions for these synergy numbers which are set out in Appendix A of the announcement issued by Chiquita and Fyffes today. The synergy and earnings enhancement statements in this press release should not be construed as a profit forecast or interpreted to mean that the earnings of ChiquitaFyffes in 2015, or in any subsequent period, would necessarily match or be greater than or be less than those of Chiquita and/or Fyffes for the relevant financial period or any other period. ^3 The combined figures are not projections of how the Combined Group will trade. For illustrative purposes, 2014 estimated combined pro forma EBITDA is stated as Chiquita's projected adjusted EBITDA for the fiscal year ending December 31, 2014 of $130 to $150 million with Fyffes estimated 2014 EBITDA stated as $62 million, being the mid-point of Fyffes projected adjusted EBITA for the fiscal year ending December 31, 2014 as set forth in Fyffes announcement dated on or about August 27, 2014 plus, for comparability purposes, LTM depreciation of €7.1 million (converted to US$ at an exchange rate of $1.3242 to €1.0000), and assumes run-rate synergies of $60 million per revised merger benefits statement. In addition to the significant benefits inherent in our combination with Fyffes, Chiquita shareholders will benefit from the recent outperformance of Fyffes' business.  Fyffes has announced that it has delivered a strong result in the first half of 2014 with adjusted EPS 39.2% higher on a year-over-year basis.  Based on its first half performance and continued positive trading conditions early in the second half, Fyffes has increased its target adjusted EBITA for the full year 2014 to the range €38 to €42 million, from €30 to €35 million previously, and compared to €32.7 million for the full year in 2013.^4 CHIQUITAFYFFES COMBINATION IS RESULT OF A COMPREHENSIVE PROCESS The Chiquita/Fyffes combination resulted from a lengthy and thorough process that began in December 2010, when the Chiquita Board established a strategic transaction committee, comprised solely of directors who are "independent" as defined by the New York Stock Exchange, to assist in considering potential strategic alternatives. Since that time the Company has engaged with multiple industry participants regarding a potential transaction. As part of this process, Chiquita's Board unanimously determined that a combination with Fyffes is in the best interest of Chiquita shareholders and the Board continues to recommend that shareholders vote "FOR" the proposed transaction with Fyffes. To ensure that Chiquita is best positioned to drive value for shareholders, Chiquita has initiated efficiency measures and pricing actions in 2014 for its salads business. This business will remain under close focus. CHIQUITA BOARD AND MANAGEMENT HAVE TAKEN SIGNIFICANT ACTIONS TO IMPROVE PERFORMANCE AND HAVE A TRACK RECORD OF CREATING VALUE FOR SHAREHOLDERS Chiquita's Board and management team have been, and continue to be, focused on driving strong performance and shareholder value. In the second half of 2012, the Company developed and began to implement a transformation strategy, 'Return to the Core', with the intent to increase profitability in Chiquita's core bananas and salads business, to drive costs out of the supply chain and to be more competitive in its core markets. Since new management was appointed in October of 2012, the Company has been successfully executing this strategy and, as a result, Chiquita has become a more efficient operator and the Company's financial results have dramatically improved. Under the new strategy, Chiquita's EBITDA is set to double from approximately $70 million in 2012 to $130 to $150 million in 2014^5, and the Company's stock has outperformed the market appreciating 105.3% from August 7, 2012, when Chiquita announced its restructuring, to the announcement of the proposed Fyffes merger on March 10, 2014. Chiquita reports its financial results in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). In an effort to provide investors with additional information regarding Chiquita's results and to provide more meaningful year-over-year comparisons of the company's financial performance, as well as the measures that management uses to evaluate the company's performance against internal budgets and targets, Chiquita reports certain non-GAAP measures as defined by the SEC. Non-GAAP financial measures should be considered in addition to, and not instead of, U.S. GAAP financial measures, and may differ from non-GAAP measures that other companies use.  For information regarding the reconciliation of non-GAAP forecast numbers for 2014 to the most comparable GAAP numbers, reference is made to pages 343-347 of the definitive Proxy Statement/Prospectus/Scheme Circular dated August 6, 2014.  ^4 Fyffes reports its financial results in accordance with International Financial Reporting Standards ("IFRS"). For information regarding the reconciliation of EBITA to the most comparable GAAP numbers, as well as additional other information regarding Fyffes results and updated forecasts, reference is made to pages 346-347 of the definitive Proxy Statement/Prospectus/Scheme Circular dated August 6, 2014 and to Fyffes interim results which were also announced today. Chiquita's turnaround has been the result of multiple initiatives to drive value in our core operations and product offering. As part of the "Return to the Core" strategy, Chiquita has restructured its value chain, achieved significant SG&A savings, and taken key pricing actions. Selected measures include: * SG&A rationalization that has reduced SG&A by $75 million, 220 basis points 2011 – LTM 6/30/14; * Exited non-core businesses, including avocados and grapes, smoothies, fruit chips, fresh cut fruit and juice bars, that contributed negative EBIT (earnings before interest and taxes); * Implemented agronomic and tropical fruit value chain efficiency actions and infrastructure improvements improving productivity per hectare 12% on owned farms and contributing $35 million of combined efficiency benefits in 2013; * Consolidated and modernized the Fresh Express production infrastructure, replacing four inefficient facilities with a single Midwest operation that is now fully complete and performing to expectations; * Successfully entered the private label value added salads space; * Invested in quality, service and innovation actions and capabilities to support our premium branded fresh businesses; * Implemented banana pricing actions in Europe (2013) and North America (2014); * Implemented value-added salads packaging efficiency and pricing actions with effect from July, 2014; and * Accelerated investment in Core R&D, including work on new banana varietals and disease-resistant plants, and salads blends and kits innovations. As outlined above, Chiquita's Board and management team have delivered tangible results and proven their ability to achieve cost savings as demonstrated by the transformation of Chiquita into an efficient global sourcing and logistics company providing premium quality bananas and salads to consumers at the right value. The Board and management continue to evaluate the business and look for ways to further improve performance and drive efficiencies. To that end, Chiquita announced today a range of efficiency initiatives anticipated to reduce Chiquita's costs by approximately $14 to 16 million. In order to achieve these savings, Chiquita's current US-Gulf shipping rotation will be replaced with larger, more efficient vessels allowing for some costs and stowage capacity to be shared with a third-party shipping partner, resulting in lower per unit shipping costs for both. Chiquita anticipates that these savings will begin impacting Chiquita's results late in the fourth quarter of 2014 and will be fully implemented in 2015, helping ensure that Chiquita remains on track to achieve its long-term financial objectives.^^6 Chiquita has confirmed that the Chiquita profit forecast for the fiscal year ending December 31, 2014 contained in its proxy statement dated August 6, 2014 remains valid for the purpose of the combination. ^5 See prior note. ^6 Chiquita's statement of anticipated savings in this press release should not be construed as a synergy statement or other statement or estimate of the anticipated financial effects of the combination.   THE CUTRALE GROUP AND THE SAFRA GROUP ("CUTRALE / SAFRA") $13.00 OFFER IS INADEQUATE, UNCERTAIN AND NOT IN THE BEST INTERESTS OF CHIQUITA SHAREHOLDERS As previously announced, after careful consultation with its legal and financial advisors, our Board unanimously determined that the Group's unsolicited offer is inadequate and not in the best interests of Chiquita shareholders. Having made such a determination, Chiquita determined not to furnish information to, and have discussions and negotiations with, the Cutrale Group and the Safra Group at this time. The Board firmly believes that doing so in response to an inadequate and highly conditional offer is unlikely to result in a superior proposal.  In reaching its decision, the Board took into account, among others, the following factors: * Board's belief that Chiquita/Fyffes could trade at prices in excess of $13/share post-closing, once trading multiples reflect the synergies as they begin to be realized * Fact that the market is valuing Chiquita's stock at greater than $13/share^7 * Chiquita stock has traded above, and remained above, $13 since the Cutrale / Safra's offer was made public on August 11, 2014 * Cutrale / Safra offer is conditional and uncertain. Cutrale / Safra: * Submitted a highly conditional, non-binding proposal, including a condition on due diligence, and have not provided any detail on financing * Have no experience in the banana or salads industries which adds significant uncertainty to the outcome and length of due diligence * To our knowledge, do not have any significant history of successfully completing M&A * Had the opportunity to offer adequate value but did not * Board's belief that offer is opportunistic and not reflective of inherent value of ChiquitaFyffes, as described below The Cutrale / Safra offer, in our judgment, is not a compelling alternative to ChiquitaFyffes as it limits the ability of Chiquita shareholders to realize long-term value and the offer itself is opportunistic, at a low premium and a low multiple off a weak point in the stock price. Chiquita is in the midst of a turnaround initiated by new management and  is also about to close on a merger that would create a leading global produce company with financial flexibility, significant cash flows and a more efficient capital structure. Approving the ChiquitaFyffes merger maintains the option for shareholders to secure a premium on the combined value, at the right price that give effect to Chiquita's transformation plan and the benefits of the combination, whereas an offer at $13 per share does not provide shareholders with adequate value for a combined ChiquitaFyffes. Essentially, Chiquita shareholders are being asked to vote down a value-creating merger vs. the alternative of Chiquita stand-alone, as there is no deal for Chiquita at an adequate price. ChiquitaFyffes post-merger is a better and more valuable business than Chiquita stand-alone without the proposed merger. YOUR VOTE IS EXTREMELY IMPORTANT Your vote is extremely important regardless of the number of shares you own. Whether or not you plan to attend the Special Meeting, we urge you to vote FOR the transaction by signing, dating and returning the enclosed proxy card at your earliest convenience. Internet and telephone voting options are also available and easy to follow instructions may be found in your proxy. The method by which you vote does not limit your right to vote in person at the special meeting.  We strongly encourage you to vote. ^7 Bloomberg In addition to Alliance Advisors, LLC, whose contact information is contained in Chiquita's Proxy Statement, shareholders may also contact MacKenzie Partners Inc. with any questions or for assistance in submitting their proxy. Contact information for MacKenzie Partners is set forth below. ______________________________________ MacKenzie Partners, Inc. 105 Madison Avenue New York, NY 10016 proxy@mackenziepartners.com