Dole investors urge Murdock to sweeten bid
By Courtney Schlisserman
Bloomberg News Service
WESTLAKE VILLAGE, Calif. David Murdock, the billionaire chief executive of Dole Food Co., will have to sweeten his takeover bid for the world's largest fruit and vegetable producer to at least $35 a share, investors said.
"Obviously, we'd prefer a higher price," said Steve Laveson, an analyst at Becker Capital Management, which oversees $1.5 billion in assets, including 919,500 Dole shares. "If we didn't think (Dole) was worth the higher price, we would've sold the shares on the open market."
The transaction, which includes the assumption of about $1.2 billion in debt, is valued at about $2.5 billion.
Dole is worth more because profitability is increasing after a cost-cutting program, while the company has expanded its offerings to salads in bags and other products that aren't as dependent on weather, investors said.
"The Dole brand is very valuable," said Alexander Roepers, president of Atlantic Investment Management Inc., which owns 6 percent of Dole's shares and is the second-largest investor after Murdock. "The restructuring plan is throwing off huge profits."
Roepers, who urged the special committee that reviewed the proposal to reject the offer, said he'd be satisfied with an offer of $35 a share. He thinks the company is worth $40 to $50 a share in the next year to year and a half if it remains public and improves its investor relations.
The 79-year-old Murdock, who's been running Dole since 1985, said he has financial backing for the takeover from Deutsche Bank AG. His assets are estimated to be worth $1.1 billion, according to Forbes magazine's list of the world's billionaires.
Murdock, who didn't return telephone calls seeking comment, has said the unpredictability of the company's earnings have hurt its share price. Dole would be better served as a privately run company because it wouldn't have to operate under the constraints that come with the short-term perspective of investors, he said.