Peter Tennyson, 67, a corporate partner in the Orange County office of Paul Hastings.
David Murdock, the 90-year-old billionaire who serves as chairman and CEO of both Dole Food Company and real estate developer Castle & Cooke—the former parent company of Dole that was spun off into a separate business in 1996.
Murdock is taking Westlake Village, California–based Dole private by acquiring the 60 percent stake in the company that he does not already own in a deal worth $1.6 billion, including assumed debt.
Dole announced Monday that it had reached an agreement to sell the balance of the company to Murdock for $13.50 in cash per share—32.4 percent premium over the company's closing price on June 10, the day before Murdock's initial takeover offer became public. The deal includes Murdock's assumption of roughly $400 million in Dole debt.
The transaction has been approved by a special committee of the Dole board and is expected to close during the fourth quarter of this year, pending approval from regulators and a majority of Dole shareholders—Murdock excluded. The terms of the agreement include a 30-day "go-shop" period during which Dole can solicit alternative proposals before the deal goes to shareholders for their vote.
Gibson, Dunn & Crutcher advised Dole on the sale, while a Sullivan & Cromwell team represented the special committee of Dole's board.
THE BIG PICTURE
This is the second time Murdock has taken Dole private. The billionaire—who is credited with growing the company into a global fruit and vegetable giant after he buying its then-parent, Castle & Cooke, in 1985— took Dole private for the first time in 2003 for $2.5 billion. In 2009, he returned the company to public status by raising $446 million in an initial public offering valuing it at $12.50 per share.
Sales for the world's largest producer of fruits and vegetables have slipped in recent years. The New York Times reports that Dole's sales were down 11 percent last year, to $4.2 billion, and that the company lost $144.5 million. Dole launched a strategic business review in May 2012 to consider alternatives designed to reverse its fortunes. Gibson Dunn advised Dole last September on the sale of its global packaged foods and Asian produce businesses to Japan's Itochu Corporation—a $1.69 billion cash deal meant to help pay down the company's debt. (Tennyson and other Paul Hastings attorneys advised on a related $650 million financing.)
Now, Murdock is betting that another going-private deal can provide Dole with the juice necessary to boost its value. In his June 10 letter to the Dole board, Murdock wrote that in addition to providing cost and tax savings, he believes taking the company private, and offering shareholders a healthy premium, "will give the company greater flexibility to make investment and operating decisions based on long-term strategic goals without the concern that a public company must have for the investing public's short-term expectations."
Though Tennyson insists he is not the only lawyer to whom Murdock has turned on various matters over the years, their relationship does date back nearly four decades. Tennyson says he started working with Murdock as an O'Melveny & Myers attorney in the late 1970s, handling M&A matters involving the Murdock-owned company now known as International Millennium Mining Corporation. After Murdock bought Kannapolis, North Carolina–based textile company Cannon Mills Company in 1982, Tennyson came on board as general counsel. He served as Cannon Mills's top in-house lawyer for two years before returning to private practice.
Tennyson has continued his relationship with Murdock since joining Paul Hastings from Jones Day in 1995. He led a team of Paul Hastings attorneys that advised Murdock on his first deal to take Dole private, in 2003. And, last year, Tennyson advised Murdock's Castle & Cooke on the sale of one of its subsidiaries to warehouse and logistics company Lineage Logistics for an undisclosed amount.
(Having worked with Murdock for decades, Tennyson is also no stranger to the billionaire's reputation as a health enthusiast who famously told The New York Times that he plans on living to 125. Tennyson says he has personally received diet and nutrition advice from the nonagenarian.)
Before approaching Dole's board with his initial proposal in early June, Murdock rounded up a team of professionals that included financial adviser Deutsche Bank, as well as Tennyson and a host of Paul Hastings partners in Los Angeles, New York, and Washington, D.C. But, after years of working with Murdock, Tennyson has learned that the billionaire prefers a hands-on approach to negotiations and "does not take business advice from lawyers."
"He generally has a pretty good idea of what he wants to do," Tennyson says. "And what he usually wants is to find a way to do it properly."
In between Murdock's initial offer and the signing of an agreement this week came what Tennyson calls "intense" negotiations, the focus of which was the demand by the company's special committee that Murdock increase his original offer of $12 per share. In the end, the sides agreed on a price that raised the offer by $1.50 per share, to $13.50.
Of course, Murdock has been down this road with Paul Hastings before, having used the firm to take Dole private just a decade ago. Still, Tennyson says that one thing he's learned working with the CEO is that he does not like to wait for a response. "When David asks a question, he really does not want to wait four or five days for an answer," Tennyson says.
As evidenced by his letter to the board, the major factor driving the deal is Murdock's belief that he can give the company a boost by taking it private, as he did several years ago. Tennyson believes at least part of Murdock's interest in Dole's success is tied to his personal belief in the benefits of a healthy lifestyle.
"Mr. Murdock really believes in the notion of encouraging people to consume more fruits and vegetables," Tennyson says. "And he thinks Dole is a big vehicle that can promote that sort of thing."