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Castle shareholder
criticizes buyout
The price is too low,
By Russ Lynch
the firm complains
Star-BulletinA Houston investment partnership that owns holds a minority position in Castle & Cooke Inc. said today it will vote its shares against Chairman David H. Murdock's proposal to buy the company for $18.50 a share.
Furtherfield Partners L.P. said the offer is inadequate and not in the interests of the shareholders, given the company's unique real estate assets.
Furtherfield did not disclose how many Castle & Cooke shares it owns. A spokesman for Castle & Cooke said Furtherfield holds 16,000 shares, less than one-tenth of 1 percent of the company.
"The buyout price of $18.50 per share is a mere fraction of the company's book value of $32.88 a share and less than what the company itself paid for shares only two years ago in a Dutch auction tender offer," said Furtherfield's manager Daniel A. Breen III.
In mid-1998, describing its stock as undervalued, Castle & Cooke launched the Dutch auction, a reverse tender offer in which shareholders were given a chance to offer their shares back to the company and submit bids as to what they thought they were worth.
Castle & Cooke ended up paying $19 a share for 3 million shares.
"We believe that the value of Castle & Cooke's real estate has appreciated well above its book value," Breen said. The company owns 98 percent of the island of Lanai and has other extensive land holdings in Hawaii and on the mainland.
On March 29, Murdock said a company he owns outright was willing to pay $17 a share for the 73 percent of Castle & Cooke that Murdock did not already control. A committee of independent directors evaluated the offer and proposed the higher $18.50 price.
Castle & Cooke's full board of directors approved that offer and on May 22 Murdock announced that he and the company had signed a definitive merger agreement at that price. However, Murdock's Castle Acquisition Inc., formed through his Flexi-Van Leasing Inc., has yet to make a formal tender offer.
According to the SEC files, the next biggest shareholder after Murdock's 27.2 percent is Franklin Resources Inc. of San Mateo, Calif. with just under 10 percent.
Next come New Yorkers Daniel R. Tisch and Thomas J. Tisch, together holding 9.6 percent. Three other shareholders each own less than 7 percent.
Several shareholders on the mainland and in Hawaii have filed lawsuits seeking to block the deal, saying their shares are worth more than Murdock is offering. Murdock's bid falls through if he is not offered at least a majority of the shares he doesn't already own.
