Dole says Murdock offer not enough

By Carol Wolf
Bloomberg News Service

WESTLAKE VILLAGE, Calif. — Dole Food Co.'s board said it rejected Chief Executive Officer David Murdock's $29.50-a-share takeover offer and is negotiating with Murdock for a higher price.

Murdock extended his offer for the world's largest fruit and vegetable producer to Nov. 13, from Nov. 6, because of the negotiations, the company said in a statement issued by Business Wire.

The board has hired Goldman, Sachs & Co. to contact other potential financial and strategic buyers, the company said.

Murdock offered last month to buy the company and take it private in a transaction valued at about $2.5 billion. Murdock wants to buy the 76 percent of the company not already owned by him or his family.

Dole shares rose 14 cents to $28.73 at 4 p.m. Eastern time in New York Stock Exchange composite trading. The shares have risen 41 percent in the past year.

It wouldn't be the first time that Murdock had to raise a buyout proposal to win shareholder approval for the purchase of a company he led. In 2000, he raised a bid for real estate developer Castle & Cooke Inc. after the board rejected an earlier offer.

Analysts said a rival bid is unlikely because the fresh and processed-fruit business has been hurt by an oversupply of produce such as bananas.

Del Monte Foods Co. agreed to merge operations with H.J. Heinz Co. in June, while Chiquita Brands International Inc. emerged from bankruptcy in March. Dole has relied on cost savings to keep profit rising with sales declining since 1999.

Atlantic Investment Management Inc., a New York-based money manager that owns 6 percent of Dole's common shares, told a special board committee to reject Murdock's offer, saying it was "substantially below the fair value of the issue," according to a Securities and Exchange Commission filing.

Murdock's offer price includes the assumption of debt. The company has about $1.2 billion in total debt, Dole Chief Financial Officer Richard Dahl has said.