ASSOCIATED PRESS
Billionaire David Murdock, right, who appeared with Sen. Terry Sanford, D-N.C., in a 1991 news conference, plans to fund research on nutrition that can be used to persuade consumers to eat more Dole fresh fruits and vegetables.
Dole Food Co., founded in Hawaii in 1851, ceased being a publicly traded company yesterday just two days after shareholders approved billionaire David Murdock's $2.5 billion offer to take the company private. Dole makes switch to private
Star-Bulletin staff and wire
Murdock, who acquired the 76 percent of Dole's common stock that he and his affiliates didn't already own, paid $33.50 a share in cash. His buyout also included the assumption of about $1 billion in debt.
The stock closed up 4 cents at $33.48 yesterday on its final day of trading on the New York Stock Exchange. The shares were up 2.8 percent for the year.
"This is a momentous occasion in Dole's 152-year history, and we are extremely excited about the long-term advantages for Dole without the short-term pressures and constraints of the public equities market," said the chairman and chief executive officer, who also owns Castle & Cooke Inc., which includes most of the island of Lanai, and thousands of acres of land on Oahu.
Dole, the world's largest producer of fresh fruits and vegetables, in recent years has expanded its product line to include packaged salads and fruits. It is also one of the world's largest producers of fresh cut flowers.
For a company that is notoriously quiet on Wall Street, analysts weren't surprised with Murdock's decision.
"The company failed to communicate effectively with investors and I think Murdock did not want to deal with the accountability of running a public company," Heather Jones, analyst with BB&T Capital Markets in Richmond, Va., said earlier this week after the shareholder vote.
The company did anticipate its first-quarter profit to decline as a result of lower vegetable prices. But Jones said the company had a "good deal of earnings growth potential. Not only that, they are a very well-run and -managed company," she said. "I would have loved to see the company remain public."
Murdock, who has been CEO of Dole since 1985, has guided the company through shaky times.
He characterized the recent spate of accounting woes as "a difficult period" for publicly traded companies. But he said those problems did not influence his decision.
One of the first things Murdock plans to do with the now-private company is fund research on nutrition that can be used to persuade consumers to eat more Dole fresh fruits and vegetables.
"If we teach people how to eat properly, it's going to help them," Murdock told the Ventura County Star. "It's going to also help the company because in order to eat properly they're going to have to buy our product."
Dole, which has its corporate headquarters in Westlake Village, Calif., has divested most of its Hawaii production but still grows pineapple on 4,000 acres in Wahiawa.
Murdock launched his bid for Dole in September, offering $29.50 per share. He said taking the company private was necessary because efforts to cut costs, diversify its business and invest in additional businesses have had little effect on the stock price. Murdock was forced to raise his offer after the board rejected the price and sought other buyers.
The 79-year-old Murdock has long been interested in health and nutrition.
Last year, Dole published an "Encyclopedia of Foods, a Guide to Healthy Nutrition." The company also built a food science and nutrition laboratory at Dole's headquarters.
