AT AN age when many 90-year-olds are satisfied with playing cards in a nursing home, Dole Food chief executive David Murdock is planning his next big deal.
The billionaire, who already owns 40 per cent of one of the world’s largest producers and marketers of fruit and fresh vegetables, made an offer yesterday to buy out the rest of the company in a deal that values it at just over $1bn (£639m).
Dole shares jumped as much as 22 per cent to $12.44, well over the offer price of $12 per share, suggesting that some investors expect a higher bid for the company, which has posted losses for the last three quarters.
Analysts said Murdock may well have to raise his offer to clinch the deal, but that another bidder was unlikely.
“It’s a good starting bid and it’s a sufficient bid to commence negotiations with the independent committee of the board,” said Roy Behren, managing member at Westchester Capital Management, which owns 4.25 per cent of Dole and is its fourth-biggest shareholder. Murdock is the biggest.
The proposed deal for Dole, which traces its roots to pineapple plantations set up in Hawaii in the mid-1800s, is the latest in a string of management-led bids, topped by Michael Dell’s $24bn offer for the computer company he founded.
Dole’s intrinsic value – based on an estimate of its cumulative annual growth rate in the coming 10 years – is around $9.46 per share, according to StarMine, a unit of Thomson Reuters.
That is about seven per cent below the stock’s Monday close and 21 per cent below Murdock’s offer.