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Murdock’s
Castle stake
rises to 92%

More stockholders tender
their shares as he prepares
to take full control of the firm

By Russ Lynch
Star-Bulletin

California billionaire David H. Murdock picked up nearly half a million more shares of Castle & Cooke Inc. last week, pushing his control of the Hawaii-mainland landowner and real estate developer to 92 percent.

At that level, the takeover at $19.25 a share by Murdock, the company's chairman and CEO, is automatic. The buyout should be completed by late August or early September, as soon as some legal steps are completed, Scott A. Griswold, a Murdock spokesman in Los Angeles, said today.

Castle & Cooke will then no longer be a shareholder company. "All shareholders are canceled out" and there will not be any Castle & Cooke shares, Griswold said. All the shares turned in during the offer have been accepted and will be paid for promptly, he said.

Those who did not turn in their shares while the tender offer was active will nevertheless get checks equal to $19.25 for each share they had held. However, those checks will not go out until the formal completion of the acquisition, Griswold said.

Shareholders who disagree with the price can formally seek an appraisal in court, provided they have not tendered their shares. This may explain why there was still some action in Castle & Cooke shares on the New York Stock Exchange today. Altogether, 14,000 shares changed hands today and the stock closed at $19, down 25 cents.

Analyst Craig Silvers of Sutro & Co. in Los Angeles, who has followed Castle & Cooke closely, said some people might be buying shares in hopes of getting a higher price through an appraisal process.

Griswold said there is no guarantee an appraisal would come out as high as $19.25 a share. Company officials have said an argument could be made that it was only the takeover bid that drove it that high and it was trading at less than $13 a share before Murdock announced his takeover intentions.

Technically, Murdock's tender offer was made by Castle Acquisition Co., a wholly owned subsidiary of New Jersey-based Flexi-Van Leasing Inc., which in turn is entirely owned by Murdock.

After certain information is mailed to shareholders, Castle Acquisition will merge into Los Angeles-based Castle & Cooke, which will then go private. Since Murdock's ownership has passed the 90 percent level, no further action by Castle & Cooke directors or shareholders is needed.

By an initial deadline on July 14, Murdock had received 10.7 million shares. By an extended deadline late Friday, the total had risen to 11,170,000, or about 89 percent of shares not already owned by Murdock before he started his buyout offer. Added to the 4.6 million shares Murdock already owned, he now has 92 percent of the 17.2 million total.

Murdock was owner of 27 percent of the company when he launched his bid March 29 with the announcement he was willing to pay $17 a share. He later raised that to $18.50 and again to $19.25.

Ownership brings him prime real estate in Hawaii, including 98 percent of Lanai, thousands of acres on Oahu, as well as significant real estate holdings on the mainland. His involvement with the company began when he baled Dole Food Co. out of financial trouble in 1985 and gained control. He later spun off the residential and commercial real estate business as a separate company, Castle & Cooke. He remains chairman and CEO of both Dole and Castle & Cooke. Murdock has estimated it will cost him $615 million to buy Castle & Cooke, after paying for the shares and assuming the company's debt.