Several Companies Show Interest in Acquiring Dole
Just because its proposed spinoff of Dole Food Co. has been stalled doesn’t mean that Castle & Cooke Inc. will be stuck with the produce giant forever.
Castle & Cooke officials said Thursday that they have been contacted by “several major companies” interested in acquiring Dole and have retained the investment banking firm of Goldman, Sachs & Co. to assist in evaluating a possible sale.
It has been 14 months since Dole’s Los Angeles-based parent company--which also owns Oceanic Properties Inc. of Honolulu--announced that it was working toward spinning off Dole Food Co. And two months have passed since the spinoff was stalled because of tightening credit in the real estate market and a delay in getting government approval for the separation.
“A sale of Dole Food Co. could be an attractive alternative to the planned separation of our two businesses,” David H. Murdock, chairman and chief executive of Castle & Cooke, said.
Carol Klein, a spokeswoman for Castle & Cooke, would not comment on which companies have shown interest in Dole or on the timetable for a possible sale. The company’s stock closed at $30.50 Thursday in trading on the New York Stock Exchange, up 37.5 cents. The company announcement came after the market closed.
“My sense has been that this real estate market will get a lot worse before it gets better,” said Larry Selwitz, an analyst for Cruttenden & Co. in Newport Beach. “Castle & Cooke is saying, ‘Look, it’s going to be a long time before we can do the restructuring.’ So, if someone comes along with a decent offer, that could solve the problem.”
Dole Food is “a one-of-a-kind company” in the fresh produce industry, he said, with operations in 48 countries, a major investment in capital equipment and the world’s largest fleet of refrigerated container vessels for transporting fruits and vegetables.
“How would you characterize the world of the 1990s: a global economy,” he said. “If you’re the Japanese, you’ve got to froth at the mouth. It would be a master stroke” to buy Dole Food.
Selwitz estimates that the selling price for the company could be around $2.5 billion, or an estimated $40 per share. Castle & Cooke has 59 million shares outstanding.
“I think you’ll see a huge jump in price tomorrow,” Selwitz said.
