GROWTH SPURT BY DOLE STOCK CEO OFFERS BID TO TAKE COMPANY PRIVATE.

Byline: Evan Pondel Staff Writer

WESTLAKE VILLAGE - Dole Food Co. stock surged Monday, after David H. Murdock, chairman and chief executive officer, offered to buy 76 percent of the fruit grower's shares he doesn't own for $29.50 each.

The all-cash offering is a 2.1 percent premium over Monday's closing price of $28.99. Murdock said the total enterprise value of the transaction is approximately $2.5 billion, costing the magnate and his family about $1.27 billion to acquire 43 million shares.

``Companies go private for different reasons,'' said David Katchman, analyst with Morningstar in Chicago. ``In this case, being shielded from a volatile economy is probably a significant motive.''

Murdock, who is in his late 70s, anticipates completing an agreement prior to Nov. 6. In a news release, Murdock said Deutsche Bank has already been engaged ``to advise on the transaction.''

The chief executive of Dole since 1985, Murdock has guided the Westlake Village-based company through several soured economies. Katchman said growing fruit is a difficult business because companies have to endure two taxing elements: poor weather and shifty stock markets.

Dole's rival, Chiquita Brands International Inc., emerged from Chapter 11 bankruptcy in March. Chiquita continues to survive in an industry riddled with intense competition - often resulting in an oversupply of bananas.

``Given these conditions it may not be such a bad idea to go private,'' Katchman said.

But Murdock wouldn't indicate why he wanted to take Dole private. C. Michael Carter, vice president and general counsel for Dole, said Murdock's motives are unknown and that his announcement was a ``complete surprise. This is not a management call. The board has yet to take a viewpoint.''

Katchman said he's puzzled why Dole would want to go private when the company appears financially stable. In the company's second quarter ended June 15, Dole posted net income of $66.8 million, or $1.19 a share, compared with $37 million, or 68 cents a share, reported in the same period a year ago.

Although Katchman was hesitant to pin Murdock's decision on new corporate governance rules, the world's No. 1 producer of fresh fruit, vegetables and flowers does not have to certify its quarterlies with the Securities and Exchange Commission until Nov. 19, because its fiscal year doesn't end until Dec. 31.

The fruit croppers could have particular interest in expressing their servitude to sound accounting practices. The company was audited by Arthur Andersen LLP for more than a decade before it switched to Deloitte & Touche.

Richard Dahl, Dole's chief financial officer, said in a previous interview that certifying financial statements is especially important right now because of the current environment.

``It's simply the right thing to do,'' he said. ``It also allows me to retrace old ground and ask a lot of questions.''

Dahl was named CFO in June, replacing Kenneth J. Kay. Aside from the ability to become more acquainted with Dole's financials, Kay said the certification process enables employees to know ``their business well.''

``And I don't think certifying our statements creates a financial burden, either,'' he said. ``If anything, it's just time-consuming.''

Dole shares rose $4.50, or 18.37 percent, to close at $28.99 Monday.

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Source: Daily News