Castle & Cooke
closed up 4 13/16, or 40%, to 16 7/8 in Thursday trading after its biggest stockholder, New Jersey-based
, offered to buy the real estate company for $17 a share.
The proposal represented a 41% premium over Wednesday's closing price of 12 1/16 and it valued the stake it did not already own at about $213 million.
Flexi-Van Leasing, a private company that specializes in the rental of transportation equipment, owns 26% of Castle & Cooke equity. It is controlled by David Murdock, who is the chief executive of both companies.
Castle & Cooke, a Los Angeles-based company that builds homes and owns resorts in Hawaii, was spun off from
to shareholders in 1995. Murdock is also the chief executive of Dole.
Craig Silver, an analyst at
, downgraded his buy rating on Castle & Cooke to hold when its shares rose above $16.
"This stock is strictly an arbitrage play," Silver said. "The average investor realizes that there is not a lot of upside potential at this price."
Silver said he expected the board of Castle & Cooke to seek a slightly higher bid price before the deal closes.
is advising on the transaction.
Silver believes Castle & Cooke stock is undervalued and sees the net worth of the company at $29 a share, based on the recovery in Hawaii's economy and housing prices.
"Murdock's timing is excellent," Silver added.