Castle & Cooke OKs a Buy-Out of Bumble Bee

Castle & Cooke Inc., getting closer to casting off its fish-packing operations, said Wednesday that it has agreed to sell its Bumble Bee Seafoods division to a group of investors led by the unit’s management.

The sale is a leveraged buy-out, with management of San Diego-based Bumble Bee borrowing a $40-million down payment against existing inventory and paying the undisclosed balance from profits over the next five years. Talks about such a buy-out were first disclosed last June.

Completion of the transaction will leave Castle & Cooke with only one fish-packing plant--Hawaiian Tuna Packers in Honolulu, which markets tuna under the Coral label.

Outbid 2 Other Suitors

Bumble Bee management, which outbid two other suitors, is also negotiating to purchase that plant, according to Vice President Ernest W. Peterson, a member of the group buying the division. Others in the group are President Patrick W. Rose and Vice Presidents James T. McCarthy and H. Kenneth Branson.

Peterson said the group is also seeking to buy Bumble Bee’s tuna-packing plant in San Diego, which has been empty since it closed in May, 1982, with a resulting 900 layoffs.

There are no plans to reopen it as a tuna cannery, Peterson said.

Bumble Bee, with annual sales of about $200 million and 1,500 workers worldwide, also has canneries in Puerto Rico and Ecuador.

Castle & Cooke, whose major product line is Dole, has been disposing of its fish canneries and seafood packing plants since mid-1982. However, it has retained the right to market those products under the Bumble Bee label.

The company has been stung by losses recently. For the first quarter ended Oct. 6, losses totaled $12.2 million on revenue of $460 million, compared to a year-earlier profit of $3.2 million on revenue of $402 million.

For the year ended last June 16, Castle & Cooke lost nearly $77 million on revenue of $1.5 billion, compared to a 1983 loss of $49.7 million on revenue of $1.4 billion.