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Castle to send
checks after
Murdock’s win

The company will be
going private soon

By Russ Lynch
Star-Bulletin

Shareholders in Castle & Cooke Inc. who turned in their stock in response to Chairman and CEO David H. Murdock's buyout offer could begin receiving checks within a few days.

A company official said today that Castle & Cooke could cease to be a publicly traded company as early as the end of this week.

The company's agent is expected to begin mailing payments as early as tomorrow to those who accepted Murdock's offer of $19.25 a share, Castle & Cooke said in an earlier statement.

With 89 percent of the shares in hand already, Murdock set a five-day extension through Friday for others to offer their shares, but the statement said all the shares turned in so far have been accepted and the former holders will be promptly paid.

Dean Estrada, a Castle & Cooke spokesman, said it is possible that public trading of the shares, now listed on the New York Stock Exchange, will end as soon as the extended offer ends Friday.

Murdock will be paying about $206 million for the shares that have been turned in so far and if all the rest are tendered, the buyout will cost him $241 million. However, Murdock will also pick up all of Castle & Cooke's debt and he has estimated that would bring his overall buyout cost to about $615 million.

The announcement that Murdock has succeeded in his takeover bid was made late Saturday, after a count showed that he has been offered more than the number of shares he needs to buy the company personally and take it private.

There are still 1.8 million shares outstanding, but trading slowed to a trickle today.

Only 11,500 changed hands today, compared with an average of about 66,000 a day this year and a peak of 587,700 on March 30, the day after Murdock's first buyout announcement. The closing price today was $19.19, down 6 cents from Friday.

Castle & Cooke, whose full board has agreed to let Murdock buy the company, said that the tally after last Friday's deadline of midnight in New York showed that 10.7 million shares had been tendered to Murdock. That was about 85 percent of the shares not already owned by Murdock. His $19.25 offer had been conditional on getting at least 75 percent of what he did not already hold.

Murdock has accepted the shares that were offered and his privately owned Flexi-Van Leasing Inc. now owns about 15.2 million shares, or 89 percent of Castle & Cooke, according to the company's statement late Saturday.

Here are the next steps:

The remaining shareholders have another chance, until the end of the day Friday, to turn in their stock for $19.25 a share.
The formal acquisition will then take place in late August or early September. Flexi-Van will merge into Castle & Cooke and the company will go private.
If Murdock is holding 90 percent or more of the outstanding shares, he can use a "short-form merger" that does not require any further action by the Castle directors or shareholders and the count to date makes it likely he will achieve that goal. Even if shareholder approval is required, Murdock owns so much of the stock he can do what he wants.

Some shareholders had said they were holding on to their stock in the belief that an appraisal process will bring dissenting shareholders more than $19.25 a share. Castle & Cooke, which has warned that the process could take a long time, has said that the dissident shareholders ultimately may not gain anything.

The appraisal process under Hawaii law, which requires a judge's approval to begin, requires dissident shareholders to be paid "fair value." That could mean as low as $12.06 a share, the price the stock was trading at before Murdock announced March 29 that he wanted to buy the company, Castle & Cooke has said.

In a recent letter to its shareholder-information agent, Castle said that a court process would not start for at least 60 days after the merger gives Murdock control and could take "a number of months at a minimum."

Murdock's acquisition of Castle & Cooke, the offspring of a company founded in Hawaii in 1851, will; bring him a real estate gem -- 88,000 acres on Lanai, or 98 percent of the island where Castle has two luxury resort hotels, a resort golf course and luxury housing developments.

It would also give him personal ownership of about 11,000 acres on Oahu, where Castle has residential real estate developments, such as Mililani Town and Mililani Mauka, and commercial properties, such as the 42-acre Dole Cannery complex in Iwilei.