Total Produce executives eye Dole merger bonuses

Total Produce's executive chairman Carl McCann, chief executive Rory Byrne and finance director Frank Davis stand to receive special bonuses on the completion of a merger of the group with US peer Dole Foods to create the world's largest fresh fruit and vegetable supplier with $9.7 billion (€7.9 billion) of sales.

Documents published on Wednesday relating to the planned tie-up and US flotation of the combined entity, to be called Dole plc, following an initial public offering (IPO), said it was “contemplated that one-time awards will be granted to our executive directors in connection with the transactions”.

“These grants will be effective upon the IPO date and may include cash-based awards and shares-based awards. The precise breakdown between cash and share portions will be determined by the compensation committee and the board prior to the IPO date,” it said. The document did not put a value on the potential awards.

Mr Byrne will become chief executive of Dole plc and Mr Davis will take on the role of chief financial officer, while Dole Foods' chief operating officer, Johan Linden, will retain the same title within the merged group.

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Total Produce first announced the planned combination in February, saying that Dole plc would be headquartered in Dublin but listed in the United States.

Dole plc hopes to raise $500 million to $700 million by way of a public flotation in the US, possibly as early as June. The move will see Total Produce de-list from the Euronext Dublin and the London Stock Exchange.

Total Produce bought a 45 per cent stake in Dole in 2018, with the remaining 55 per cent owned by Los Angeles-based Castle & Cook.

Mr McCann said the 2018 transaction was “a halfway stage . . . it was never going to be the end position”.

Total Produce’s shareholders will own 82.5 per cent of Dole plc on completion of the merger, but they will be diluted down to 55 per cent after the IPO.

Scheme of arrangement

The merger is being carried out by a so-called scheme of arrangement, which will require Total Produce shareholder vote at an annual general meeting on June 17th and High Court approval in July.

Funds raised in the planned IPO will set a “strong foundation [that] will allow the enlarged group to invest in future corporate acquisitions in addition to investing in organic and development opportunities,” Total Produce said in the shareholder circular on Wednesday.

The combined group will also have a $153.5 million gap in its defined-benefit pension plans, the document said.

“The funded status of our benefit plans is dependent upon many factors, including returns on invested assets, actuarial assumptions, including the level of certain market interest rates and the discount rate used to determine pension obligations,” it said. “Unfavourable returns on the plan assets, or unfavourable changes in applicable laws or regulations, could materially change the timing and amount of required plan funding, which would reduce the cash available for Dole plc’s business.”