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Murdock begins official
offer for Castle

By Russ Lynch
Star-Bulletin

Castle & Cooke Inc. Chairman David H. Murdock made his bid to buy the company official today, filing a formal tender offer to buy its shares at $18.50 each.

However, shareholders who do not believe that price is high enough are suing to delay or halt the process.

Lawyers representing a Maui shareholder this week won a court decision to let them argue the case in Hawaii and to question Castle & Cooke officials, possibly including Murdock, on how they arrived at the $18.50 value.

Murdock, who is seeking the 73 percent of Castle & Cooke that he does not already own, today extended the offer until July 6, a week past his original deadline. If by that time a majority of the shares he doesn't own -- half of the 73 percent plus one share -- is turned in, the acquisition will proceed.

The full board of directors signed a definitive merger agreement last month after an appraisal by independent directors not associated directly with Murdock came up with the $18.50 value, an increase from Murdock's original March 29 proposal of $17,

Technically, a new company called Castle Acquisition Co. is making the offer. It is a subsidiary of Flexi-Van Leasing Inc., which in turn is wholly owned by Murdock. If the tender offer succeeds, Murdock will end up owning all of Castle & Cooke, a developer of homes and commercial real estate in Hawaii and on the mainland.

Among other assets, he will get sole ownership of 98 percent of Lanai, the island where Castle & Cooke developed two luxury resort hotels, a golf course and luxury apartments selling for $1 million or more each.

Murdock said tender-offer papers have been filed with the Securities & Exchange Commission and each shareholder will soon get a package detailing the offer.

Some shareholders have publicly opposed the deal, saying Castle & Cooke's land holdings alone make it worth much more than $18.50 a share.

Honolulu attorney Tom Grande, representing one shareholder on Maui, won a court victory Tuesday keeping the case in Hawaii, the location of most of Castle & Cooke's land assets. The company had wanted the case moved to Los Angeles, near Castle & Cooke's head office.

Grande also was given authority to question Castle & Cooke directors and others about the price and to view the financial information on which they based the $18.50 offer. He said he needs that information to file a protective order that would halt the takeover process until the minority shareholders have a chance to make a pitch for a higher price.

Castle & Cooke shares, which moved higher because of the buyout offer, were trading at $18.371/2 at noon today on the New York Stock Exchange, down 25 cents. When Murdock first made his offer, the stock was trading at just over $12.