Chiquita Brands International has won more favourable terms for a proposed merger with Fyffes in an effort to save the all-stock deal following a rival approach.

Chiquita investors will own 59.6 per cent of the combined company under the revised agreement, compared with 50.7 per cent when the transaction was first detailed in March, the companies said today in a statement.

Chiquita postponed a shareholder vote on its plan to buy Fyffes this month while it sought talks with Cutrale Group and Safra Group on their unsolicited $614 million proposal to acquire the banana producer. Chiquita was granted a waiver by Dublin-based Fyffes to talk with Cutrale and Safra.

"We continue to believe that the merits of the combination are in the interests of both parties," David Holohan, an analyst at Merrion Capital in Dublin, said by e-mail. He has a buy rating on Fyffes.

As part of the new agreement, Fyffes shareholders will receive 0.1113 ChiquitaFyffes shares for each Fyffes share they hold and Chiquita shareholders will receive one ChiquitaFyffes share for each Chiquita share.

While ChiquitaFyffes would domicile in Ireland, where the corporate tax rate is 12.5 percent, making it a tax inversion deal for Chiquita, the potential for tax savings isn’t one of the main reasons for the transaction, said Holohan.

Fyffes Chairman David McCann would become chief executive officer of the combined company.

Chiquita is still in talks with Cutrale and Safra, and will inform shareholders if it receives a revised proposal, it said today.

The companies agreed to raise the termination fee payable to Fyffes to 3.5 per cent of the total value of Chiquita’s issued share capital should the merger fail in certain circumstances.

Bloomberg