Dole Food receives $1.5bn buyout proposal

US-based Dole Food has announced that it has received an unsolicited proposal from David H Murdock, the company’s chairman of the board and CEO, to acquire all of the outstanding shares of common stock which are not already owned by Murdock or his family, in a deal which values the company at $1.5bn.

As per the proposal, Murdock, who already owns 40% stake in the company, will pay $12 per share in cash for the remaining 60% stake, in a deal which will bring the value of the transaction to $645m.

The offer represents an 18% premium over Dole’s closing price on 10 June, but is below its 52-week high of $15.19 in September.

Dole stated that the board of directors will set up a special committee of independent directors to evaluate Murdock’s proposal and its implications, and determine the appropriate course of action that is in the best interests of the company and its stockholders.

The company said that the process of considering the proposal is only in its beginning stages and no decisions have been made by the board of directors.

Murdock said that Deutsche Bank would advise on the transaction and that he has received a ‘highly confident’ letter from the bank on the financing for the transaction.

Murdock entered into the fresh produce business in 1985, when he acquired the nearly bankrupt Hawaiian firm Castle & Cooke, which owned pineapple and banana producer Dole Food.

In 2003, Murdock took Dole Food private for $2.5bn; however, he took the company public in 2009, by selling shares at $12.50 each, which valued the company at more than $1bn at that time.

Murdock served as CEO for Dole Food from 1985 to 2007 while being the largest shareholder of the produce company.

He returned to his position as CEO earlier this year, after David DeLorenzo stepped down to head Dole’s worldwide packaged foods and Asia fresh businesses, which were sold to Japanese trading house ITOCHU in a $1.68bn all-cash deal.

Dole Food, based in Westlake Village, California, is one of the world’s leading producers and marketers of fresh fruit and vegetables, with 2012 revenues from continuing operations of $4.2bn.