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Monday, March 27, 2000

Philippine firm
may buy stake
in Dole Food

San Miguel is ready to spend
$1 billion, a report says

From staff and wire reports


MANILA -- San Miguel Corp., a leading Philippine food and beverage conglomerate, said today it is seeking to acquire a stake in Dole Food Co., the world's largest maker of fresh fruit and a major landowner in Hawaii.

Dole Foods Co. "As of the moment we're are interested in acquiring a stake in Dole Food Co. but there are no definitive matters to disclose," San Miguel told the Philippine Stock Exchange. The Manila-based company said it has nothing further to disclose for now.

San Miguel is looking to expand with the $1 billion cash it amassed by selling its stakes in Nestle Philippines Inc. and Coca Cola Beverages Plc two years ago.

The Philippine Daily Inquirer reported Friday that San Miguel is prepared to spend $1 billion to buy Dole Chairman David H. Murdock's 24 percent stake in the company and to buy out other shareholders. Murdock's stake in Dole is worth about $210 million based on Dole's last quoted stock price of $15.56.

The stock, traded on the New York Stock Exchange, closed up 25 cents to $15.81 on Wall Street.

Dole executives could not be reached for comment this morning.

"Dole could be an attractive company to acquire," said Colbert Nocom, research manager at ABN Amro in Manila.

"Dole's share price is at a five-year low and the company fits well with San Miguel's food business."

Dole, hurting from a banana trade war in Europe, said in January that it hired Goldman, Sachs & Co. to study a possible sale. The world's largest producer of fresh fruit earned a $48.5 million profit last year on revenue of $5.1 billion.

Based in Westlake Village, Calif., Dole was founded in Hawaii in the mid-1800s and still has substantial land and agriculture operations in the state. The "Atlas of Hawaii" lists Dole as the state's third-largest private landowner with nearly 123,000 acres.

Developer Castle & Cooke Inc., owner of extensive resort and real estate holdings in Hawaii, was part of Dole but was spun off as a separate company in 1995.

San Miguel, which controls 85 percent of the Philippine beer market, has been on the prowl for acquisitions for at least two years. In June, it came within a whisker of acquiring PT Indofoods Sukses Makmur of Indonesia, the world's largest noodle maker.

For San Miguel, a Dole acquisition would help further expansion overseas.

"Dole is a global brand and its operations overseas could help San Miguel's push overseas," said Gonzalo Bongolan, research chief at PCCI Securities Brokers Corp. "But I doubt Dole will be a big addition to local business because Del Monte is a more popular brand here."

Dole Philippines Inc., the local unit of Dole, operates a plantation in Mindanao, the Philippines' second-largest island. Dole's Philippine unit, one of its major production sites, mostly grows bananas and pineapples.

Dole Philippines earned a 1998 profit of 239 million pesos on revenue of 5.7 billion pesos, according to a BusinessWorld survey of the nation's top 1,000 corporations.

Bloomberg News contributed to this report.

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