WESTLAKE VILLAGE, Calif. – Dole Food Co.’s Chairman and CEO David Murdock and his family on Tuesday offered to buy the fresh fruits and vegetable business with a bid that values the entire company at approximately $1.07 billion.
The Westlake Village, Calif., company said that its board will be meeting over the next several days to assess the unsolicited offer. It said that it is only in the beginning stages of evaluating the bid and has made no decisions about the proposal.
Murdock and other family members are offering $12 per share for the shares of the company that they don’t already own. According to FactSet, Murdock holds a 39.5 per cent stake in Dole, which has about 89.5 million outstanding shares.
The offer represents an 18 per cent premium to Dole’s closing price Monday. Shares of the fresh fruit and vegetable company traded above the offered price Tuesday, suggesting some shareholders expect a higher offer.
Dole has gone through a lot of major changes recently.
It sold its packaged foods and Asia fresh business for $1.69 billion in a deal that closed in April. That allowed Dole to become solely an international commodity produce company, with a narrower focus that also makes its earnings more volatile.
Last month Dole said it would indefinitely suspend its $200 million share repurchase program and use its cash instead to update its shipping fleet to enhance growth prospects. The company said that another factor in the suspension of the repurchase plan was the drag on earnings due to recent losses in its strawberry business.
Dole had 2012 revenue from continuing operations of $4.2 billion.
Standard & Poor’s Rating Services put the company on watch for a possible downgrade. S&P said the deal could increase Dole’s debt obligations and weaken its credit. It put all its ratings, including Dole’s “B” junk-grade corporate credit rating, on CreditWatch with negative implications.
Dole’s stock soared 22.2 per cent to close at $12.46 Tuesday.