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Excerpt from My Upcoming Book About the Proposed Going Private Transaction at Dole and Its Shareholders Fighting Back

June 25, 2013 | About:
I have finished up writing the main transcript of my book and have done one full revision and edit of it. I have sent the book off to some family members and a couple recently published investing authors to get some feedback on things that I could be doing better.

After receiving some feedback from those sources, (thank you all so much!), I am in the process of going back over the entire book to make improvements. I wanted to release this portion of the book right now to you all because I have talked about Dole (DOLE) quite a bit on this blog and I wanted to share my full thoughts about the ridiculous situation at going on at Dole right now.

It appears that a lot of Dole's current shareholders agree that the buyout offer at $12 is ridiculously low as its own shareholders have been suing the company to stop the low-ball going-private transaction offer.

Below are just two of the many articles about Dole getting sued for the proposed transaction.

Levi & Korsinsky Notifies Investors of Claims of Breaches of Fiduciary Duty in Connection With Going Private Proposal From Company's CEO

More cases against Dole board say Murdock bid too low

Directly below are two pages from my upcoming book where I talk about the transaction. Please feel free to leave any comments or concerns you have about the actual excerpt from my book or the proposed Dole transaction as I would love to converse about either. Also keep in mind that I still have a lot of editing and revising to do if you find any grammar or editing errors.

"As I have been writing, editing, and revising this book, Dole’s Chairman Mr. Murdock has put in an offer to take the company private once again like I thought that he may do so I wanted to write my thoughts on the ridiculous offer being given to Dole shareholders. I did think that Mr. Murdock may have wanted to take the company private again but what I didn’t expect was the manipulation of the company’s stock price in my opinion before that happened. Shortly after Dole sold its worldwide operations to Itochu Dole management began to do some very strange things. The value of its land holdings, that Dole management themselves estimated to be worth around $500 million when they were getting ready to sell their worldwide operations to Itochu, suddenly stated that they thought their land now was worth only around $250 million only a few months later.

This was shocking to me and led to me sell the stock I owned in Dole in my personal portfolio and the portfolios that I manage because I figured that Dole was doing something untoward to try to get the value of its shares down so the company could be taken private again at a cheaper valuation. One of my followers on Seeking Alpha and I actually talked about this and both came to the same conclusion that something fishy was going on.

After selling my shares in Dole due to the above situation I stopped paying attention to the company all together to concentrate on the research of other companies until it came out that Dole was planning to do a massive buyback of its shares. I thought this was a very good thing for them to do since I found the company to be very undervalued when writing my second article on them so I started to look into them a little bit again. Before I could do even minimal research into the new situation at Dole though its management made another very strange decision. A few days after Dole announced that it was going to buy back $200 million worth of its shares it changed its mind and all of the sudden decided to update its fleet of container ships instead and canceled the proposed share buyback program.

Of course this sent the share price falling and again led me to believe that its management was trying to manipulate the share price lower so that it could be taken private at an unreasonably low valuation.

Unfortunately it turns out that I appear to have been right because a month or two after Dole decided to cancel its proposed share buyback program to instead buy new container ships, which of course sent the share price lower, Mr. Murdock announced that he was putting in an offer to take Dole private at $12 a share.

Mr. Murdock brought Dole public in 2009 at $12.50 a share so this in and of itself is ridiculous since the company is much more financially stable now than it was then due to getting rid of its giant debt load. In my opinion this entire situation from the changing of the estimated value of its land by 50% shortly after announcing that they thought it was worth $500 million, announcing the proposed $200 million share buyback and then a few days later canceling it, and then Mr. Murdock attempting to take the company private again at an incredibly low valuation should be investigated. If Dole is allowed to be taken private at $12 a share, which it probably will because Mr. Murdock at my last check still owned 40% of the company, then the company should be investigated for manipulating its stock price. If the company is taken private for a paltry $12 per share then its remaining shareholders are getting screwed.

If a situation like this happens to a company you own be very careful, trust your research, trust your instincts, and get out of owning the company if you think you need to. There are a lot of other companies you can spend your time researching and owning rather than spending your precious time and capital having to worry about whether a company’s management is going to screw over shareholders. Dole's current shareholders are fighting back by suing the company and I wish them good luck because the proposed buyout offer is ridiculously low."

About the author:

Jason Rivera
I have been investing for about 4 years and really only dedicating myself to it since February of 2012. Self taught from books, websites, blogs, etc. Value investor and special situations investor, hoping to emulate and mix the philosophies of Warren Buffett, Benjamin Graham, Seth Klarman, and Joel Greenblatt. Aspiring to build my own "personal" MBA through the knowledge I am gaining.

If you like my work feel free to visit my blog at http://vijourney.wordpress.com/ where I write about various investing topics, post my articles, list my goals, and where I have posted my investing philosophy.

If you have any comments, questions, or potential job opportunities for me please contact me through Guru Focus, through my blog above, through twitter @JMRiv1986 or at jmriv1986@gmail.com

Visit Jason Rivera's Website


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