Geest, Britain's largest and best-known banana importer, put its banana business up for sale yesterday, signalling the end of a 40-year trading link.
In a flurry of activity, Geest issued a statement saying it was in discussions to sell the business. Hours later, Fyffes, the Irish group that is Geest's main UK rival, said it was interested in bidding and had formed a joint venture with the Windward Islands Banana Company to make a competing offer.
The sale is expected to yield in excess of pounds 75m. The deal will mark the end of Geest's often troubled relationaship with banana importing. The business has recently been hit by tropical storms, disease and hurricanes.
Geest was originally founded by the Dutch van Geest family in Britain in the 1930s when it specialised in the sale of Dutch flower bulbs.
It began importing bananas in 1953 when it was asked by the British government to develop a commercial banana business. It gradually built up a fleet of a dozen ships importing fruit from the Windward Islands. Four years ago it bought a 3,000-hectare bananaplantation in Costa Rica.
Though the Geest family still own a large part of Geest stock they no longer have an active role in the running of the business and do not sit on the board. Leonard van Geest is chairman of Littlewoods, the retail and football pools group.
More recently, Geest has had a rocky ride due to the volatility of the banana business. Hurricanes and tropical diseases have forced it to issue a flurry of profits warnings. The shares have slumped from 371p in January 1994 to a low of 107p earlier this month. Yesterday they jumped 25p to 142p.
The latest warning on trading came earlier this month when the company said a banana glut and a sharp fall in banana prices would mean that this year's profits would be "materially below" last year's figure of pounds 12.8m. Analysts are now forecasting that the company will record a pounds 4m loss in the year to December after pounds 12m of restructuring charges.
The company blamed a 30 per cent drop in the price of bananas between this October and the same month last year.
Fyffes's collaboration with the Windward banana company follows the island's fears that the sale of the Geest business could harm the four islands that supply the UK with a large part of their bananas.