Westlake Village-based Dole Food Co. said Oct. 13 its initial public offering is expected to raise up to $575 million by selling nearly 36 million shares for between $13 and $15 each.
With $7.6 billion in 2008 revenue, Dole is the largest private company in the Tri-Counties. The company was public until 2003, when owner and real estate magnate David Murdock bought the company out and took it private.
Dole has not said when shares will hit the market. Dole has said the money will go toward paying down debt, including an $85 million tab remaining from the Four Seasons Hotel Westlake Village it built to focus on executive health and wellness.
Investors and start-ups alike are watching Dole’s move to become a public company again as a bellwether for whether life has returned to the IPO markets. Such offerings dove sharply last year but have begun rising again in the second half of this year as Wall Street anticipates a flood of equity offerings in a rising stock market.
Capital markets observers say it’s essentially that Dole price the shares modestly so that their price rises in trading after the initial sale.
“It’ll be a disaster not just for the underwriters, and not just for Dole … it’ll be major negative news for the IPO market” if shares don’t gain value in post-sale trading, said Lloyd Greif, president and chief executive of Greif & Co. in Los Angeles. “When you have a market trying to feel the ground beneath its feet, the last thing you want to do is run when you should be walking.”
Dole has been working to reduce and rework its debt load. On Sept. 25, the company sold $315 million in debt due in 2016 to refinance debt due sooner.
Dole said the money from selling stock will go toward paying down its Four Seasons Hotel debt, $44 million to pay what is essentially its corporate credit card and $200 million to repay notes due in 2011.
Since Dole went private, Murdock — who, with a net worth of $4.4 billion ranked at No. 84 on Forbes magazine’s list of the 400 richest Americans in 2008 — has been the firm’s sole stockholder.
Murdock is also the owner of the Four Seasons Westlake Village, an executive health resort, and was the developer of Lake Sherwood, an upscale golf course and country club near Westlake Village that has hosted the high-profile World Challenge golf tournament, a benefit for the Tiger Woods Foundation.