DOLE'S DEBT A CONCERN DESPITE BUYOUT, CREDIT RATING LOWERED TO JUNK STATUS.

Byline: Gregory J. Wilcox Staff Writer

WESTLAKE VILLAGE - Wall Street gave a tepid response on Thursday to Dole Foods Co. Inc. chairman David H. Murdock's $2.5 billion buyout of the company, adding 14.52 percent to the stock price.

Dole's stock closed at $32.58, up $4.13 but still 92 cents under Murdock's $33.50 a share offer, prompting one investor to tell Reuters that this indicates market skepticism about the deal.

Trading volume was especially heavy, though, at 3.5 million shares, more than nine times the average daily volume.

Dole, the world's biggest grower of fruits and vegetables, announced that directors accepted Murdock's sweetened purchase package late Wednesday night. Most of the buying action came shortly after the market opened Thursday.

But after the markets closed Thursday, Standard & Poor's downgraded the company's corporate credit rating to junk status and indicated a further reduction may be in the offing amid concerns about debt.

Dole brushed this off, saying it would not amount to much.

``We think it's knee-jerk,'' company spokesman Michael Carter said of Standard & Poor's action. ``They didn't even wait until the proxy gets filed so they can understand the capital structure.''

Standard & Poor's could not be reached for comment.

Murdock is buying about 76 percent of Dole stock not already owned by him and his family.

The current offer is $4 a share, or 14 percent, more than his September proposal of $29.50 a share. It's a 37 percent premium over what the stock was trading at prior to Murdock's original offer.

Murdock, one of America's richest men, is also assuming about $1 billion in Dole debt.

Deutsche Bank advised Murdock on the deal and is heading a group of financiers providing about $1.6 billion in financing.

Dole's board formed a special committee to evaluate Murdock's offer and hired investment banker Goldman Sachs to contact other potential buyers.

Murdock's buyout fits with what's become a trend in corporate America of executives taking companies private because they think the stock price is undervalued.

Operating Dole as a private company could give Murdock more leeway in shoring up the balance sheet then recovering his investment by taking the company public once the stock environment improves.

A stockholder vote on the buyout will probably be held in late February or early March, the company said.

Analyst Heather Jones at BB&T Capital told Reuters that she thought the company would sell for $37 or $38 a share.

``I don't think he'll have a problem getting (the deal) approved by shareholders,'' she said.