Dole Food Company, Inc. (DOLE) disclosed Tuesday morning that it has received a proposal from chief executive officer and chairman David H. Murdock to acquire all of the issued and outstanding shares of Dole not already owned by Murdock and his family for $12 each in a bid to take the company private. The unsolicited offer values the Westlake Village, California-based fresh fruit and vegetable company at about $1.07 billion, an 18 percent premium to Monday’s closing price of $10.20.
Murdock and family currently own about 39.5 percent of Dole’s 89.5 million outstanding shares. Murdock will also assume the company’s debt.
Dole said that its board will be meeting over the next few days to establish a Special Committee of independent directors to evaluate Murdock’s offer.
Murdock has a long history with 160-year-old Dole, saving the company from bankruptcy in the early 1980’s. In 2003, Murdock took the company private only to bring it back to the public domain six years later in an IPO at $12.50 per share, valuing the company at approximately $1.1 billion.
Dole reported revenue of $4.25 billion in 2012, down form $4.78 billion in 2011, as the company sold units that accounted for about $539 million in sales. Net loss for the year was $142 million. Excluding special items, Dole posted a profit of 49 cents per share in 2011, compared to $1.37 per share in 2011.
In May, the company said that corporate divestures were largely responsible for swinging to a first-quarter loss of $65.6 million from a profit of $17.2 million in the year prior quarter. Analysts were expected a gain of 11 cents per share. In April, Dole completed the sale of its worldwide packaged foods and Asian fresh businesses to ITOCHU Corp. for $1.69 billion. Revenue was down 3 percent compared to the 2012 quarter at $1.05 billion, versus $1.03 billion expectations. In the fourth quarter of last year, Dole reported sales of $888 million and a net loss of $210 million as discontinued operations from the ITOUCHU deal cut-into sales.
In March, the company forecast 2013 earnings at the low end of its guidance of $45 million to $60 million because of declines in the fresh fruit industry, particularly bananas. In May, Dole indefinitely suspended its $200 million share buy-back program, saying it would be using its cash to update its shipping fleet to take advantage of an “opportune window” in the shipping industry. The company also noted that it expected losses of $23 million below plan in its strawberry business because of unusual weather conditions in California in the first quarter.
Shares of DOLE dropped to $9.25 earlier this month, their lowest level since July 2012 before mustering a bounce back over $10 in the past four trading days. Shares were essentially flat over the last year, but have moved higher in pre-market activity with the Murdock offer, surging about 25 percent to $12.65.