Shares of Dole Food Company Inc. (NYSE: DOLE) soared on Tuesday after its Chairman and Chief Executive David H. Murdock offered to acquire the Company in a deal which is estimated at about $1.5 billion.
Murdock is the largest stakeholder of the company, holding about 40% of outstanding shares. Murdock offered to pay $12 for each share held at Dole, which implies a premium of 18% over the closing stock price on Monday.
Shares gained about 20% in early trading hours.
Murdock expects to sign a binding agreement by July 31st. However, Murdock also added that he would not proceed with the offer unless it was unanimously accepted by the special committee of Independent Directors and majority of shareholders.
The Chairman said that the Board will hold meetings with the special committee of independent directors over the course of several days in order to discuss and make them mull on his unsolicited proposal.
The Westlake Village, California-based Company started looking towards strategic alternatives from May 2012 after witnessing sharp decline in profits. At that moment, Dole Foods Company had said that it would consider separating its one or may be even more businesses wholly or partially, look for possible spin offs, joints ventures or potential sell-off the business.
Accordingly, the Company sold its worldwide packaged foods and Asia fresh foods produce unit to a Japanese firm, Itochu Corp in April 2013 in an all cash deal valued at $1.69 billion.
The Company now manages fruit and vegetable business in North America and fruit businesses in Africa, Europe and Latin America.
Murdock said the Deutsche Bank would provide legal advice over the transaction, adding that he had obtained a “highly confident” letter from the lender for financing the deal.
Just last month, the Company reported that it swung into fiscal quarter loss as the bottom line was weighed by charges arising from sale of several business units.
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