Fyffes' proposed $1 billion merger with its fruit distributor peer, Chiquita Brands International, may have fallen at the final hurdle last year when it was rejected by the US company's shareholders, but a handful people on the Fyffes side still managed to gain something from the whole affair. Some more than others.
The annual report for Fyffes published this week reveals that the proposed merger was known within the company as Project Chicago, an odd choice considering the merged entity was to have been headquartered in Dublin, listed in New York, and arose from discussions that started in New Orleans.
David McCann, the executive chairman of Fyffes who was to have run the merged entity, received a pay package, excluding pensions and share options, of €1.25 million last year, up 25 per cent.
The annual report reveals McCann also received a special payment of €200,000 in recognition of the "exceptional additional commitment of time and effort" he gave to Project Chicago. Finance director Tom Murphy picked up an extra €150,000, while its operating chief, Coen Bos, received an extra €75,000.
But the biggest winners from the ill-fated merger attempt were – quelle surprise – the accountants, lawyers and other assorted advisers retained by Fyffes to put the deal together.
McCann tells investors in his review that advisers were paid a heart-stopping €14.3 million in relation to Project Chicago. This is an enormous sum, especially when one considers that Project Chicago ultimately failed.
Chiquita’s shareholders rejected it on the basis that the terms on offer simply were not enough. The lawyers and accountants surely advised Fyffes on where to set those terms, and therefore must share some blame for their rejection.
McCann soothes shareholders by pointing out that Fyffes received a break fee of €18.6 million, leaving €4.3 million as a “surplus”. About €525,000 of that went on extra payments to the directors, leaving shareholders with a paltry €3.8 million between them to compensate then for the failed merger attempt.
Ireland really is the best small country in which to be an adviser.
