Dec 18 (Reuters) - Belgian frozen foods company Greenyard NV is exploring an acquisition of Dole Food Co, a U.S. fruit and vegetable producer that could be valued at more than $2.5 billion, including debt, people familiar with the matter said on Monday.
California-based Dole has also been considering a potential initial public offering, but a deal with Greenyard could provide a quicker avenue for Dole's 94-year-old CEO David Murdock to cash out on his ownership of Dole.
Murdock views Greenyard's offer as better than that of private equity firms that took an interest in Dole, according to the sources, who asked not to be identified because the talks are confidential. However, there is no certainty that Greenyard, which has a market capitalization of close to 900 million euros ($1.06 billion), will secure the necessary financing for a deal, or that it will agree to terms with Dole, the sources added.
If the two companies fail to clinch a deal, Dole will continue to assess other offers as it proceeds with plans for an IPO, one of the sources added.
Greenyard and Dole did not immediately respond to requests for comment.
Dole, once the world's largest producer of fruits and vegetables, was taken private by Murdock in 2013 in a $1.2 billion deal following a four-year run as a publicly listed company. That deal came as Dole struggled to generate profits amid volatile demand and low prices for bananas, its highest-selling product.
Before going private, Dole had sold its packaged foods and Asia fresh produce businesses to Japan's Itochu Corp for $1.7 billion, shrinking itself by a third, to help pay down debt.
Since Dole's sale to Murdock, the fruit producer has cut costs, sold non-core assets, improved its supply chain and diversified its product lines, the company said in its IPO paperwork with the U.S. Securities and Exchange Commission.
Dole, one of the largest producers of bananas and pineapples, has also said it expects to benefit from the increasing demand for fresh produce from health-conscious consumers.
The company generated $4.51 billion in revenue last year, but posted a net loss of $23.7 million. That compared with a loss of $144.5 million and revenue of $4.25 billion in 2012, the year before Dole went private.
Murdock last year reached a settlement related to a lawsuit that alleged that he short-changed shareholders in 2013 when he took Dole private.
Half of Greenyard is owned by Belgian entrepreneur Hein Deprez and his family company, according to Thomson Reuters data.
(Reporting by Greg Roumeliotis and Harry Brumpton in New York; Editing by Will Dunham)