Dole CEO makes $1 billion takeover bid

June 16, 2013 

The chief executive, chairman and largest shareholder of Dole Food Co. Inc. made an unsolicited offer to take over the Westlake Village company for $12 a share.

The bid by David H. Murdock values the world's largest fresh fruit and vegetable producer at nearly $1.1 billion, representing an 18 percent premium over the stock's $10.20-per-share closing price Monday.

If the deal goes through, it's unclear what it would mean for its worldwide operation.

In Atwater, it has a sprawling 45-acre facility, with 2 million square feet of plant floor. The complex is the largest fruit freezing facility in the United States.

It freezes and packs more than 200 million pounds of fruit every year, said Jon Rodacy, vice president and general manager at Dole Packaged Foods in Atwater.

The plant's 700 full-time employees and roughly 1,400 seasonal workers clean, sort, chop, freeze and pack everything from strawberries and apricots to peaches and mangoes.

On Monday night, Murdock presented his proposal to Dole's board, which said Tuesday that it will meet in the next few days to review its options. "The process of considering the proposal is only in its beginning stages," the board said in a statement.

Murdock, who also said he would assume the company's debt in the transaction, owns nearly 40 percent of Dole's shares along with family members.

The Los Angeles billionaire said the total enterprise value of the deal, which he hopes to solidify by the end of July, is $1.5 billion.

Dole, which was founded in 1851 in Hawaii by a Harvard graduate with a taste for pineapples, reported net revenue of $4.2 billion last year, down 11 percent from the prior year.

Analysts at Janney called Murdock's proposal "an attractive transition that is likely to proceed at or relatively close to this price level," despite what they called "tougher than average near-term trends in bananas."

Working in the billionaire's favor? His strong personal liquidity position, helped along by his recent sale of the Hawaiian island of Lanai for $500 million to Oracle boss Larry Ellison.

In recent years, Dole has been seeking a smaller footprint.

In April, Dole wrapped up the sale of its global packaged foods and Asia fresh foods business — representing a third of its revenues and more than half of its operating income — to Japanese firm Itochu Corp. for nearly $1.7 billion.

Some of the fruit processed in Atwater comes from Dole's own land, where it grows strawberries and apricots in California. Some comes from as far afield as Peru and Mexico, where the company purchases and in some cases freezes fresh mangos.

The Atwater plant was purchased in 2004 from J.R. Wood. J.R. Wood, a family-owned business, had been in Merced County since the 1960s. Family members have been growing peaches in Atwater since 1919.

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