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Dole Food CEO Murdock makes $645 million offer to go private

By Simon Casey and Tom Lavell
Bloomberg News

Dole Food Chairman and Chief Executive Officer David Murdock, 90, offered about $645 million to buy out other shareholders in the fresh fruit and vegetable producer and marketer.

Murdock offered $12 a share in cash for the 60 percent stake in Westlake Village, Calif.-based Dole that’s not owned by him or his family, he said Monday in a statement. That’s 18 percent more than the stock’s $10.20 price at Monday’s close in New York.

The offer was made late Monday to Dole’s board of directors. Dole said in a separate statement the board will meet in the next several days to consider the bid, in which Murdock will also assume debt and other obligations.

Murdock is best known in North Carolina for investing $600 million to turn an abandoned Kannapolis textile mill into a multimillion-dollar nutrition research campus. The health-food devotee has also invested $131 million in an institute that bears his name.

Murdock, who served as CEO between 1985 and 2007, returned to the role in February. He replaced David DeLorenzo, who left to manage Dole’s packaged-foods and Asian businesses, which were acquired by Japan’s Itochu Corp. for $1.69 billion in a deal completed in April. Dole said May 2 that full-year earnings will be at the low end of its guidance range because of a drop in prices for bananas and berries.

Dole rose 21 percent to $12.36 at 10:50 a.m. in New York, indicating investors are betting another bidder will emerge. The shares dropped 11 percent this year through Monday.

Murdock hired Deutsche Bank AG to advise on the transaction and said he received a “highly confident” letter from the bank regarding financing for the bid.

The CEO’s bid “contemplates” the negotiation and execution of a binding agreement by July 31 and acceptance by investors owning a majority of the stock Murdock doesn’t control, as well as approval from a committee of independent directors, according to his statement.

Murdock said his bid amounts to an enterprise value of $1.5 billion, equivalent to 10.2 times projected earnings before interest, taxes, depreciation and amortization. The median multiple of the 10 bids valued at $100 million or more that were made for comparable food companies in the past 12 months was 12.5, according to data compiled by Bloomberg.

Dole was founded 162 years ago and operates in more than 90 countries, producing bananas, pineapples and lettuces in Latin America and southeast Asia, according to its website.

Staff writer David Bracken contributed.

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