GAMCO Investors, a fund managed by Mario Gabelli has disclosed raising the activist stake in Chiquita Brands International Inc (NYSE:CQB), a company that has been recently taken over. According to a filing with the Securities and Exchange Commission, GAMCO, together with Gabelli Funds and GSI hold a total of 4.43 million shares of the company, up from 3.84 million shares disclosed in an earlier filing. The position amasses 9.41% of the company’s Common Stock, versus 8.16% held earlier.
Billionaire Mario Gabelli is a notorious asset manager on Wall Street. He managed to beat the S&P 500 by more than 2% per year since its inception in 1986 through GAMCO Investors, and he also commits large amounts to small cap stocks, which also have a great performance record. GAMCO alone has more than $18 billion in equities, while overall, Mr. Gabelli invests more than $30 billion. Mr. Gabelli focuses on companies that might represent takeover targets so he focuses on cash flows rather than earnings.
Chiquita Brands International Inc (NYSE:CQB) is also a company that has been in the middle of merger talks for the last several months. In October, the company entered into a definitive merger agreement with a group consisting of Cutrale Group and Safra Group, under the terms of which Chiquita will be acquired for $14.50 in cash, which values the transaction at $1.30 billion. GAMCO disclosed holding over 6% of the company a couple of days after the announcement about the merger agreement, as the stock was trading close to $14.40.
Chiquita Brands International Inc (NYSE:CQB) is a small cap international marketer and distributor of pineapples and bananas with operations in 70 countries. The company also operates in the Salads and Healthy Snacks segment sold under the Fresh Express and other brand names. Before entering into a merger with Cutrale-Safra, the company has rejected two previous proposals from the same group. However, as the buyer has been revising its proposal, which initially represented $13.00 per share (and was later raised to $14.00), Chiquita also considered a combination with Fyffes plc. However, as Cutrale-Safra raised the offer to $14.50, Chiquita’s board accepted the proposal. The tender offer to acquire all outstanding shares expired on January 5.
As the company was going through the process of being acquired, it attracted the attention of investors. During the third quarter of 2014, several funds raised their exposure to Chiquita Brands International Inc (NYSE:CQB). Matthew Halbower‘s Pentwater Capital Management, upped its stake by 35% to 2.86 million shares, followed by Clint Carlson‘s Carlson Capital with 2.46 million shares (up by 70% on the quarter).