TheDeal: Dole's CEO Continues History of Dealmaking

NEW YORK (TheStreet) -- Billionaire David H. Murdock apparently has a taste for pineapple. And for taking a company private when it is at its weakest and later returning it to the public markets.

That proclivity is evident in his latest move, an offer of $12 per share in cash for the roughly 60% of Dole Food ( DOLE) he does not own.

The offer comes as the fruit and vegetable giant has reported declining earnings. Its net income was nearly $67 million in the hole for the quarter ended in March, according to a recent 10-Q filing, compared to a profit or positive net income for the same period a year ago of about $16 million.

Dole's Ebitda is also expected to take a hit. It generated $162 million in Ebitda for the fiscal year ended Dec. 29, but is estimated to generate just $139 million for this year, ending on Dec. 31, according to data provided by Bloomberg.

The company launched a strategic review in May 2012 and brought on board investment banks Deutsche Bank Securities Inc. and Wells Fargo Securities International Ltd. for guidance.

Murdock's history with Dole began in 1985 when he became chairman and chief executive after taking control of parent company Castle & Cooke Inc., according to reports, though details of that transaction are scant. Murdock secured Castle & Cooke when he merged it with his company Flexi-Van Corp. in 1985, according to Footnoted.com.

According to the Los Angeles Times, in 1990, publicly listed Castle & Cooke put Dole Food on the auction block, but failed to find a buyer.

In 1995 Castle & Cooke was spun off as a real estate company, while Dole remained focused on fruits and vegetables.

Murdock took Castle & Cooke private for about $600 million in 2000, according to The Deal Pipeline. At the time, he was chairman of both companies.

The price tag of the Castle & Cooke deal worked out to $18.50 per share. The company had been trading at a little over $12 per share before Murdock's bid was announced. In the five years after the split with Dole, Castle & Cooke shares never traded above $22.

In 2002 Murdock turned his attention back to Dole, taking it private in a transaction valued at $2.5 billion, or about $33.50 per share. That price represented a nearly 18% premium over the company's undisturbed share price.

"There were no natural buyers for it," one analyst told The Deal Pipeline at the time, "so I guess this was the best thing to do."

Seven years later, Murdock took Dole public again, raising about $446 million in its initial public offering.

His dealings with Castle & Cooke left Murdock in control of 98% of the Hawaiian island of Lanai, which he sold to software tycoon Larry Ellison for a reported $500 million to $600 million on June 21, 2012.

If true, that price tag was about what Murdock paid to take Castle & Cooke private in 2000.

As of March 23, according to the 10-Q filing, Dole had about $101 million in cash and cash equivalents, nearly $1.9 billion in assets held-for-sale -- which includes the proceeds likely gained from the $1.7 billion sale in September of its packaged foods and Asian fresh produce business to Itochu Corp. -- and about $1.6 billion in long-term debt. About $461 million in liabilities are connected to the assets held-for-sale, also according to the 10-Q.

The produce company has more than 89.5 million shares outstanding. At $12 per share, that would give the company a market cap of nearly $1.1 billion.

News reports have noted Murdock's tight control of Dole, which apparently scared away rival bidders when he took the produce company private in 2002.

One person familiar with the company said no rival bidder is likely to emerge. Dole has been working on its strategic review for nearly a year and any other suitors would have come forward by now, this person said.

Investors, however, are hoping that Murdock's offer is merely an opening salvo, bidding up Dole's stock about 22% in afternoon trading above the offer price to $12.44 per share.

The company said its board of directors is meeting to appoint a special committee to consider the offer.

-- Written by Richard Collings in New York City.

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