Dole Food Chairman David Murdock has offered to buy out other shareholders in the world’s biggest fresh fruit and vegetable producer in a bid he said amounts to an enterprise value of $1.5 billion.
Murdock offered $12 a share in cash for the 60 percent stake in Westlake Village, California-based Dole that’s not owned by him or his family, he said today in a statement. That’s 18 percent more than the stock’s $10.20 price at the close in New York on Monday.
The offer was made Monday evening to the board of directors of the company and Murdock will also assume debt and other obligations.
The bid hinges on “the negotiation and execution of a binding agreement” by July 31 and acceptance by investors owning a majority of the stock that Murdock doesn’t control, as well as approval from a committee of independent directors, according to the statement.
Murdock has 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.
Dole Food has about 89.5 million outstanding shares, according to FactSet.
Murdock is the founder of the North Carolina Research Campus in Kannapolis and maintains a residence in the city. Just last month he pledged $50 million for additional food research at the campus and the institute named in his honor.
The company said that its board will be meeting over the next several days to create a special committee of independent directors to assess the bid. It said that it is only in the beginning stages of evaluating the offer and that the board has made no decisions about the proposal.
Dole had 2012 revenue from continuing operations of $4.2 billion. In March the company reported a fourth-quarter adjusted loss from continuing operations and revenue that was below Wall Street’s expectations.
Last month Dole said it would indefinitely suspend its $200 million share repurchase program and use its cash instead to update its shipping fleet to enhance its growth prospects. The company said that another factor in the suspension of the repurchase plan was the drag on earnings due to recent losses in its strawberry business.
Dole has gone through a lot of major changes recently. It sold its packaged foods and Asia fresh business for $1.69 billion in a deal that closed in April. That allowed Dole to become solely an international commodity produce company, which provides a more narrow focus going forward but makes its earnings more volatile due to the nature of the fruit and vegetable business.
Its stock rose $1.85, or 18.1 percent, to $12.05 — slightly above the offered price — in premarket dealings about two hours before the market opening.
