Co-Owner Will Continue to Operate Continental Can : Kiewit Buys Out a Murdock Stake
Los Angeles entrepreneur David Murdock has sold his 20% investment in Continental Can and related holdings to co-owner Peter Kiewit Sons’ Inc., it was announced Tuesday. Terms were not given, but financial sources said the price was about $200 million.
It was just a year ago that the wide-ranging Los Angeles financier-developer and the Omaha construction firm founded by the late Peter Kiewit, in a “white knight” role, signed a $2.75-billion deal to acquire Continental Group after British industrialist Sir James Goldsmith made a takeover bid.
Murdock, who owns Cannon Mills and controls Flexi-Van Corp., said in a telephone interview Tuesday that he and Kiewit decided to part company amicably after selling some major operating units and paying off $1.5 billion in bank debt, the bulk of its borrowings on the original deal.
“It was an extremely successful transaction to both the Kiewits and ourselves,” Murdock said. “Our relationship has been extremely cordial and warm. We are very good friends.”
He said the reason for ending the Continental partnership was that the Kiewit firm wanted to continue to operate Continental Can and the remaining holdings while he “didn’t know if we wanted to be 20% of a day-to-day operating company.” Murdock said the Kiewits suggested buying him out and the deal was arranged “almost as fast” as when they put it together last June.
Kiewit, which has constructed office buildings and hotels for Murdock in the Midwest and the East, currently is the builder of a $100-million Murdock development in Baltimore.
Estimated $50-Million Profit
KMI Continental of Stamford, Conn., the Kiewit entity that now owns Continental Can as well as Life Insurance Co. of Virginia, 1.4-million acres of timberlands and some smaller insurance and energy businesses, announced the Kiewit buy-out of Murdock.
A spokesman said officials were unavailable for questions Tuesday because they had not yet returned to headquarters from arranging the transaction in New York.
When Kiewit and Murdock bought Continental, they said they were putting up $750 million between themselves and borrowing the rest. If Murdock put up 20% of that, or $150 million, the reported price just received by Murdock would represent about a $50-million return in less than a year. As is his custom, Murdock refrained from discussion of his business profits.
Assets sold from the Continental Group in the last year were largely in forest products and energy, including a natural gas and carbon dioxide transmission facilities.
Murdock, a financial operator active on many fronts, has been busy since March with a merger between New York-based Flexi-Van, a transportation equipment firm in which he owns 33%, and Castle & Cooke of Honolulu, whose best-known products are Dole brand pineapples and bananas.
Two weeks ago, Flexi-Van bought a 14% interest in Castle & Cooke that was held by an investor group led by Minneapolis financier Irwin L. Jacobs for about $57 million.
Last July, Murdock sold his 5% of Occidental Petroleum’s common stock for $194 million, a price then 42% above the market price. He still has the second-largest holding in Occidental preferred stock with a current value of about $80 million.