Murdock will retain control Dole Food after stock sale

Published 12:00 am Thursday, October 15, 2009

By Emily Ford
eford@salisburypost.comDavid Murdock, founder of the N.C. Research Campus in Kannapolis, will still control Dole Food Co. after the company sells 35.7 million shares of stock in an upcoming public offering, according to a regulatory filing.
The sale could raise more than $500 million for Dole, and Murdock’s personal finances will improve as well, the filing acknowledged.
Dole said it expects to price the stock at between $13 and $15 a share.
As part of a corporate restructuring connected to the public offering, Dole will assume $115 million of debt that Murdock accrued while building and operating a luxury hotel and wellness center in California.
Murdock and his affiliates “will be in a more favorable financial position upon completion of these transactions than they were before such transactions,” Dole wrote in documents filed Friday with the Securities and Exchange Commission.
Murdock’s substantial investment in the Research Campus, which is expected to top $1 billion, did not necessitate the Dole sale, Lynne Scott Safrit, president of campus developer Castle & Cooke North Carolina, has told the Post.
The 350-acre campus, which Murdock is building on the ruins of a shuttered textile mill that he once owned, includes branches of eight universities to study human health, nutrition and agriculture.
Some proceeds from the Dole sale will go toward debt relief on the California resort.
The company will pay off $85 million of the debt personally guaranteed by Murdock, leaving $30 million.
The offering “takes his name off a great deal of debt,” said Charles Parks, an investment adviser in Salisbury.
As part of the swap, Dole will transfer to Murdock 1,600 acres of idle farmland in Honduras worth about $12 million.
Dole has about $1.9 billion in debt. Proceeds from the sale are expected to lower that to $1.6 billion.
Murdock, 86, acquired the company in 1985 when he bought Castle & Cooke. He took Dole private six years ago in a transaction valued at $2.5 billion.
Details disclosed in the filing value Dole at $1.2 billion, the Los Angeles Times reported, less than half of what Murdock paid for it.
“The value of the company has fallen, but that doesn’t surprise me in this environment,” said Parks, whose firm, C.F. Parks, is not participating in the initial public offering. “There is not enough public information to determine why it’s worth less.”
The interactions of private, closely held companies like Dole can be hard to determine, Parks said.
After the public offering, Murdock will own 59 percent of the company.
“We are a controlled company, controlled by David H. Murdock, whose interests in our business may be different from yours,” the company said.
“Mr. Murdock and his affiliates will, for the foreseeable future, have significant influence over our management and affairs, and will be able to control virtually all matters requiring stockholder approval, including the election of directors and significant corporate transactions such as mergers or other sales of our company or assets.”
Like many other companies, Dole is trying to get some debt off its balance sheet, Parks said. Murdock will benefit too.
“This is all done to strengthen the company and his personal finances,” Parks said. “He is giving up some ownership of the company to clean up some of this.”
The company will not pay dividends but could in the future.
With the market on the upswing, Parks said Dole stands to do well with the public sale.
“The timing is going to be good,” he said.