Banana producer Chiquita Brands International said it would start takeover talks with Brazil's Cutrale Group and Safra Group after its shareholders voted against its proposed merger with Irish rival Fyffes.

Chiquita’s shares rose 3.7 per cent to $14.27 in early trading on the New York Stock Exchange on Friday. Fyffes’ shares were down 9 per cent at 90 cent in Dublin.

“While we are convinced (Fyffes) would have been a strong merger partner, we will now go forward as competitors,” Chiquita chief executive Edward Lonergan said in a statement.

Chiquita had said earlier on Friday that it would only enter into discussions with juice maker Cutrale and investment firm Safra if its shareholders rejected the proposed merger with Fyffes.

Cutrale-Safra raised its all-cash offer for Chiquita to $14.50 per share from $14 on Thursday, valuing the company at about $682 million.

Fyffes and Chiquita said recently that the implied value of their potential deal ranged from $15.46-$20.01 per share.

Proxy advisory firm Institutional Shareholder Services said on Thursday that although it was reluctant to change its recommendation before the vote, Cutrale-Safra’s revised offer might be “more compelling to some shareholders”. The firm had earlier recommended the merger with Fyffes.

Reuters