Dole Food Receives $1.5 Bln Buyout Offer From CEO David Murdock

12 Jun 2013

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12 Jun 2013 --- Fruits and vegetable producer Dole Food Co. Inc. ( DOLE ) said it has received an unsolicited proposal from David Murdock, its chairman, chief executive and the largest stockholder, to acquire all of the outstanding shares of Dole Food, not already owned by him or his family for $12.00 per share in cash. The per share consideration has a total enterprise value of about $1.5 billion.

Dole Food shares are currently up about 22 percent in pre-market trading.

Westlake Village, California-based Dole Foods said its board of directors will be meeting over the next several days to establish a Special Committee of independent directors.

In a separate release, Murdock announced that he has made an offer to acquire the nearly 60 percent of outstanding shares of Dole Food not already owned by him for $12.00 per share in cash, plus the assumption of the company's debt and other obligations.

Murdock, who controls almost 40 percent of the total outstanding shares, said he will not proceed until the offer is approved by a committee of independent directors and by a majority of the outstanding shares not owned by him.

The offer, which was made to the board of directors of Dole Food on Monday evening, represents an 18 percent premium over the closing price on June 10, 2013 of $10.20 per share and a premium of 19 percent to the volume-weighted average stock price for the one month preceding June 10, Murdock said.

The per share consideration offered represents 10.2 times of Dole's anticipated EBITDA, as provided in its most recent earnings forecast.

In addition, the offer contemplates negotiation and execution of a binding agreement by July 31, 2013 which would contain customary terms and conditions for transactions of this type, Murdock said.

Murdock has engaged Deutsche Bank to advise on the transaction and said he has received a "highly confident" letter from the bank with respect to the financing for the proposed transaction. Murdock noted that the financing, together with additional funding he is prepared to commit, is sufficient to consummate the deal.

Dole Food had recorded 2012 revenues from continuing operations totaling $4.2 billion. For its recent fourth quarter, the company posted a loss, hurt mainly by costs related to divestiture of two businesses and lower revenues as a consequence.

On April 1, the firm completed sale of its worldwide packaged foods and Asia fresh businesses to Japanese trading company Itochu Corp. (ITOCY), for $1.685 billion cash, resulting in a major portion of Dole's operations and assets being sold.

DOLE closed Monday's regular trading at $10.20 on the NYSE. In the pre-market activity, the shares are currently up 21.88 percent.