David Murdock, chairman of the board and chief executive officer for Dole Food Co. Inc. has reached an agreement with the board to buy the company and take it private for the second time in a decade.
Murdock signed a deal Aug. 12 that is described in a company news release as a “merger agreement.”
The agreement is subject to approval by the government and a majority of stockholders other than Murdock. It would allow Murdock to acquire, for cash, all of the outstanding shares of the Westlake Village, Calif., company. Stockholders would receive $13.50 per share of common stock, with the transaction that “places the total enterprise value of Dole at approximately $1.6 billion,” according to the news release.
Dole’s president and chief operating officer Michael Carter was not immediately available for comment on the status of Murdock’s offer.
The 90-year-old Murdock made an unsolicited bid June 10 to pay $12 per share, setting the value of the company at $1.1 billion. Murdock and his family members own 40% of the stock already. The offer included a clause that stated the offer would be pulled if not acted upon by July 31. The stock was at $10.20 per share immediately before June 10 offer.
Dole’s board named a special committee to consider Murdock’s offer, which came 10 years after his 2003 purchase of the company when he bought 76% of the Dole shares for $1.43 billion, plus assuming another $1 billion of debt. He took the company public in 2009.
Murdock was chief executive from July 1985 through June 2007. He returned to the CEO’s office early this year when David DeLorenzo stepped down from the post to help the Japanese company Itochu run the portions of the Dole business it bought for $1.7 billion.
That sale was finalized in April and included the global packaged foods business and Dole’s Asia fresh foods business. It came following a period of financial struggles that saw Dole report annual revenue of $4.2 billion, an 11% revenue decrease for 2012 compared with 2011.
The global packaged foods and Asian fresh food operations represented 38% of Dole’s 2012 revenues, according to financial reports, and more than half of its operating income.
Dole’s board, with Murdock abstaining, on Aug. 12 approved “the merger agreement pursuant to which Mr. Murdock will take the company private,” according to the company news release.
“The merger agreement provides for a ‘go-shop’ period of 30 days, during which the special committee, with the assistance of Lazard (Ltd.), will actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals. The transaction is expected to close during the fourth quarter of 2013,” according to the news release.