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support for appraised fair value realization

of stock investments in

Dole Food Company, Inc.



Project Status

The Shareholder Forum determined that it would not provide support for Dole appraisal rights because of the risks created by disorderly investor competition for interests. The buyout was approved on October 31, 2013 by only 50.9% of the company's unaffiliated shareholders, and it was subsequently reported that claims for appraisal rights exceeded the number of legally eligible shares.




A version of the article below appearing in the MoneyBeat section of the online Wall Street Journal, titled "Dole Food Deal Passes By Slim Margin as Hedge Funds Seek Appraisal," was distributed to Forum participants.


The following chart shows trading activity in the stock of Dole Foods, Inc. (DOLE) during the month preceding the October 31, 2013 approval of its buyout at $13.50 per share.


Source: The Wall Street Journal, October 31, 2013 article


Dole Holders Accept CEO's $1.2 Billion Buyout Deal


By Liz Hoffman

Oct. 31, 2013 7:31 p.m. ET

Dole Food Co.'s $1.2 billion sale to its chief executive and founder squeaked past a shareholder vote on Thursday while several large holders plan to seek a second opinion on the deal price from a judge, according to people familiar with the matter.

The buyout passed with the support of 50.9% of the shares not held by CEO David Murdock, who owns 39.5% of Dole and is taking it private for the second time in a decade. Deal approval required a majority of non-Mr. Murdock shares to pass.

Hedge funds holding at least 10 million shares—or more than 12% of Dole's stock—have said they would seek appraisal for their shares, a legal proceeding in which a judge sets what he or she finds to be a fair price, the people said. Judges in appraisal cases have often awarded more than the offer price, especially in buyouts by large shareholders like Mr. Murdock. An appraisal could result in petitioners receiving a lower as well as a higher price, and a decision often can take years.

The bulk of those shares are held by Merion Investment Management LP, which on Tuesday disclosed an 8.3% stake in Dole. Prior to then it hadn't disclosed a position, meaning it owned 5% or less.

Two other hedge funds have also reserved their right to seek appraisal and have forgone the $13.50 a share buyout offer, according to people familiar with the matter. A representative for Dole declined to comment, but confirmed that the company had received appraisal notices from several shareholders. Albert Fried & Co. analyst Sachin Shah said on Thursday that the company could be worth more than $17 a share, including its valuable land in Hawaii.

This isn't the first appraisal case for Merion, whose strategy includes buying shares of companies on the brink of a buyout and pushing for more in court.

Merion teamed with three other funds in 2011 to seek appraisal for 5.84 million shares of Cogent Inc., which had just been sold to 3M Co. This summer, a judge awarded the funds 3.5% more than the sale price. In 2012, the Radnor, Pa.-based fund sued for appraisal of its stake in Deltek Inc., which had been bought by private-equity firm Thoma Bravo LLC. That suit was later dismissed.

Merion is currently seeking appraisal for its 5.4% stake in BMC Software Inc., which it acquired weeks before the company's shareholders voted to approve a $6.9 billion buyout by private-equity firms Bain Capital LLC and Golden Gate Capital this summer.

Between BMC and Dole, Merion now has more than $450 million tied up in appraisals, based on the merger prices of the two deals.

Merion is run by Andrew Barroway, a former lawyer at Kessler Topaz Meltzer & Check LLP, which represents plaintiffs in big merger and securities cases. Mr. Barroway didn't respond to a request for comment.

Dole's stock price closed up a penny at $13.55, above the buyout price, in 4 p.m. trading Thursday in New York.

It would be too late for investors who acquired shares after Wednesday to benefit from an appraisal, which requires shareholders to notify the company before the vote. But a person familiar with the trading strategy said the newcomers are likely betting on a the outcome of a separate lawsuit over the deal that is moving ahead in Delaware court.

In that case, shareholders accused Mr. Murdock, who also chairs Dole's board, of manipulating the stock price in the run up to his bid for the shares he didn't own. The company canceled a planned stock buyback in May, sending shares plunging to their lowest level in nearly a year. Dole also announced it would spend $165 million on new ships, a big upfront cost the plaintiffs say was designed to further depress the shares. Mr. Murdock announced his bid two weeks later.

As it was telling stockholders the shares were worth $13.50, Dole separately was telling its banks that the company had net assets worth more than $23 a share, according to the shareholders' complaint, which cites nonpublic materials shown to lenders.

The company denies the allegations and the case faces a trial later this year or early next. That Dole shares closed above the deal price on Thursday suggested investors are optimistic Dole will be the next in that line.

Few merger lawsuits result in more money for shareholders. Most settle, with companies agreeing to disclose more information about the deal process and to pay the plaintiffs' attorney fees.

But the law firm for the Dole plaintiffs, Grant & Eisenhofer PA, has a string of big damages cases to its name. The firm secured multimillion-dollar payouts in litigation over the sale of Del Monte Foods Co. to KKR & Co. LP in 2011, of El Paso Corp.'s pipeline business to Kinder Morgan Inc. in 2012, and of Delphi Financial Group Inc. to Tokio Marine Holdings Inc.

Write to Liz Hoffman at


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