* Offer of $12/shr a premium of 18 pct over Monday close
* Murdock already controls 40 pct of company
* Shares rise well above offer
* Dole CEO is 213th richest American, says Forbes
(Adds analyst comments, company background, closing share
By Aditi Shrivastava and Pallavi Ail
June 11 At an age when many 90-year-olds spend
their time reminiscing about the past, Dole Food Co Inc
Chief Executive David Murdock is revisiting it by trying to take
the company private like he did 10 years ago.
The billionaire, who already owns 40 percent of one of the
world's largest sellers of fresh fruit and vegetables, made an
offer on Tuesday to buy the remaining 60 percent in a deal that
values Dole at just over $1 billion.
Including debt, the deal gives the company an enterprise
value of $1.5 billion.
Dole shares jumped 22.2 percent on Tuesday to close at
$12.46, well above the offer price of $12 per share, suggesting
that some investors expect a higher bid for the company, which
sells bananas, pineapples, berries and packaged salads and has
posted losses for the last three quarters.
Ten years ago, Murdock took Dole private for $33.50 per
share in a deal that gave the company an enterprise value of
$2.5 billion, though the company was much bigger then.
Analysts said Murdock may well have to raise his offer to
clinch the deal, but that another bidder was unlikely.
"The industry is volatile and we believe that investment
capital focus is likely elsewhere," said BB&T Capital Markets
analyst Brett Hundley, whose sum-of-the-parts analysis values
Dole between $14 and $15 per share.
"It's a good starting bid and it's a sufficient bid to
commence negotiations with the independent committee of the
board," said Roy Behren, managing member at Westchester Capital
Management LLC, which owns 4.25 percent of Dole and is its
fourth-biggest shareholder. Murdock is the biggest.
As chairman of the board and CEO, Murdock is very involved
in the company's strategic decisions, said a spokesman, but
Michael Carter, Dole's 70-year-old president and chief operating
officer, handles the day-to-day operations.
The proposed deal for Dole, which traces its roots to
Hawaiian pineapple plantations the mid-1800s, is the latest in a
string of management-led bids, including ones for Dell Inc
, Best Buy Co Inc and American Greetings Corp
"We see this proposed offer as an attractive transaction
that is likely to proceed at or relatively close to this price
level, especially given Murdock's strong ownership position, CEO
role, and apparently strong personal liquidity position,"
Jonathan Feeney of Janney Capital markets said.
Dole's intrinsic value is around $9.46 per share, according
to StarMine, a unit of Thomson Reuters. That is about 7 percent
below the stock's Monday close and 21 percent below Murdock's
offer. StarMine's intrinsic value estimates the cumulative
annual growth rate in the coming 10 years using a blend of its
own models and analyst estimates.
BACK IN THE SADDLE
Murdock, who was already Dole's chairman, returned as CEO in
February after David DeLorenzo left to run two businesses Dole
sold to Japan's Itochu Corp.
A high school dropout who ran the company as CEO from 1985
until 2007, he took Dole private in 2003 and took it public as
chairman in 2009 - the same year, according to a Forbes profile,
that he finally earned his high school diploma.
Murdock, who made his fortune in real estate, picked up Dole
when he took over its Hawaiian parent, Castle & Cooke, in 1985.
The nonagenarian told the New York Times in 2011 that he
wanted to live to be 125, pinning his hopes on a strict diet,
daily exercise and a lifestyle free of pills or supplements. He
also admitted to a "dictatorial" streak. (link.reuters.com/bar78t)
The 213th richest American - with a net worth of $2.4
billion, according to Forbes - Murdock was in the news last year
when he sold his 98 percent ownership of Hawaii's sixth-largest
island, Lanai, to Oracle Corp co-founder and CEO Larry
Ellison for a reported $500 million.
His latest play follows the April sale of Dole's packaged
foods and Asia fresh produce businesses to Itochu for $1.7
billion, shrinking the company's size by a third. Revenue in
2012 was $4.2 billion.
Dole is now left with its fruit and fresh vegetables
business in North America and its fruit businesses in Latin
America, Europe and Africa. About 70 percent of its revenue
comes from fresh fruit.
The company, like rival Chiquita Brands Inc, has
been struggling with volatile demand and low prices for bananas,
its biggest-selling product. In addition, its strawberry
business has suffered from swings in weather that have hurt
Dole's shares fell sharply last month when the company
announced that it had indefinitely suspended its share
repurchase program, less than a month after announcing it, and
would instead buy three new specially built refrigerated
container ships for $165 million.
Dole, which had $101 million in cash on hand as of March,
said it would set up a special committee of independent
directors to consider Murdock's offer, which represents a
premium of about 18 percent to Dole's closing stock price on
Prior to the bid, the stock had fallen 32.7 percent since
touching a lifetime high of $15.16 in September, when it struck
the deal with Itochu.
Murdock said Deutsche Bank would advise on the transaction
and that he had received a "highly confident" letter from the
lender on the financing for the deal.
(Additional reporting by Martinne Geller in New York; editing
by Saumyadeb Chakrabarty, Ted Kerr and Matthew Lewis)