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Dole DeJa Vu: Murdock Wants to Go Private Again


Dole Food's Murdock

Photograph by Ross taylor/AP Photo

Dole Food's Murdock

Dole Food (DOLE) Chief Executive Officer David Murdock, who owns 40 percent of the the ailing fruit and produce company, wants to take it private in a $1.1 billion deal. Murdock—a 90-year-old who says he’s never been sick and will live another 35 years—is offering $12 per share for Dole Food, which has been pummeled this year by weak earnings and higher costs. The company said it will form a special committee of directors to review the proposal.

A decade ago, Murdock proposed—and completed—the same deal for Dole, paying $2.5 billion for a company that was larger. In April, Dole divested its worldwide packaged foods and Asian fresh food business for $1.7 billion cash, most of which it used to pay down debt. The sold units represented about 38 percent of the company’s revenue, which was $6.8 billion last year.

“At that time, Mr. Murdock held fewer of the outstanding shares (24 percent) and had been leading the company, like now, through a cyclical rough patch in which the markets did not seem to share his vision of value,” Jonathan Feeney, an analyst with Janney Montgomery Scott, wrote in a client note on Tuesday. He predicts that the “attractive transaction” will move forward near the proposed price.

Dole shares, which closed at 10.20 on Monday, rose 22 percent before trading opened on Tuesday on the New York Stock Exchange, where the company is listed. Dole went public again in October 2009.

Dole, based in Westlake Village, Calif., has suffered losses this year from its fruit businesses, including a deep hit from Southern California strawberry fields that were damaged by extreme weather. The company is the second-largest strawberry supplier in the U.S.

Last month, Dole suspended a $200 million share repurchase program—two weeks after announcing it—so it could use the money to acquire three new refrigerated container ships. The company is also trying to sell nearly 21,000 acres that it’s not using in Oahu.

Murdock, a high school dropout with a net worth of more than $1 billion, can easily afford the bid: Last year he sold the Hawaiian island of Lanai to Oracle (ORCL) founder Larry Ellison for $500 million.

Bachman is an associate editor for Businessweek.com.

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