Dole Agrees to Murdock Buyout

Sept. 4, 2013
Chairman/CEO David Murdock ups his bid, valuing the total company at approximately $1.6 billion.

Dole Food Co.'s board of directors in August agreed to be taken private by Chairman/CEO David Murdock for $13.50 in cash per share, valuing the total company at approximately $1.6 billion.

The price represents an increase of $1.50 per share from the original proposal Murdock delivered to the Westlake Village, Calif., produce firm on June 10 and a premium of 32 percent over the $10.20 per share price of the stock immediately prior to that proposal. It includes the assumption of debt.

The agreement was the unanimous recommendation of a special committee of independent and disinterested directors.

The transaction will be financed through a combination of cash and equity contributed by Murdock, as well as bank financing, and remains subject to regulatory and shareholder approvals.

The deal provides for a “go-shop” period of 30 days, during which the special committee will solicit and evaluate other proposals. The transaction is expected to close during the fourth quarter of 2013.

Murdock and his family already own 39.5 percent of the stock. He also took Dole private in 2003, when he held 24 percent of the company's stock and paid $33.50 a share, or $1.4 billion, for the remainder, while also assuming about $1 billion in debt, reports the Los Angeles Times. 

In 2009, he took the company public in its second initial public offering. Since then, the company has had difficulties. In 2012, Dole’s continuing operations reported sales of $4.2 billion, down 11 percent from the prior year. And this April, the company sold its global packaged foods and Asia fresh foods businesses to Japanese firm Itochu Corp. for nearly $1.7 billion. The divisions represented a third of Dole's revenue and more than half of its operating income.

Murdock, who had served as chief executive from July 1985 through June 2007, was reinstated after David DeLorenzo stepped down from the post to help Itochu run its new businesses.

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