Castle & Cooke to Spin Off Dole Food to Shareholders

Castle & Cooke Inc. said Thursday that it will spin off to shareholders its Dole Food Co., one of the nation’s largest food concerns, and become solely a real estate firm.

Under the deal, due to close in May or June, Dole will become a separate publicly traded company. Shareholders will receive one share of Dole for each share of Castle & Cooke.

The move was not unexpected since David H. Murdoch, Castle & Cooke’s chairman and chief executive, announced at the company’s annual meeting last May that management was considering splitting the company in two.

Murdoch said at the time that growth in earnings and assets led to consideration of the action.

Castle & Cooke said Thursday that the spinoff will provide a tax-efficient method of implementing such a separation.

“By separating into two companies, the management of each will be able to adopt strategies and pursue objectives appropriate to its specific business,” Murdoch said in the announcement.

Los Angeles-based Castle & Cooke will retain its real estate holdings in Hawaii, including 98% ownership of the island of Lanai, and developments in California and Arizona. It will be headquartered in Honolulu and lease its Hawaiian agricultural properties to Dole.

Dole will have headquarters in Los Angeles and Honolulu.

The company also reported fourth-quarter earnings of $23.8 million, up from $19.4 million for the 1988 fourth quarter.

Fourth-quarter revenue totaled $700.1 million, up from $588.8 million a year earlier.

The improved earnings stemmed primarily from gains in the company’s real estate operations.

For 1989, earnings were $94.9 million, off from earnings of $112.3 million for 1988.

The 1988 earnings included a $17.9-million pretax gain from the sale of the company’s investment in Amfac Inc.

Revenue for all of 1989 was $2.7 billion, up from $2.5 billion for 1988.