Oracle Corp. CEO Larry Ellison has reached a deal to buy 98 per cent of the island of Lanai from its current owner, Hawaii Gov. Neil Abercrombie says.
The land's owner, Castle & Cooke Inc., has filed a transfer application with the state's public utilities commission, Abercrombie said Wednesday.
The sale price for the property forming the vast majority of the island's roughly 365 square kilometres was not immediately clear. The Maui News previously reported the asking price was between $500 million and $600 million US.
Lawyers for the seller redacted a copy of the sale agreement signed May 2, saying it includes confidential information that would competitively hurt Ellison and the seller if disclosed. The Maui News previously reported the asking price was between $500 million and $600 million.
Representatives for Castle & Cooke, owned by self-made billionaire David Murdock, did not immediately return a call seeking comment from The Associated Press. Attempts to reach a representative for Ellison through Oracle were not successful after business hours Wednesday.
Ellison co-founded the Redwood City, Calif.-based business software company in 1977. Forbes ranks him as the world's sixth-richest person, with a net worth of $36 billion as of March.
Abercrombie said Ellison has had a longstanding interest in the island."We look forward to welcoming Mr. Ellison in the near future," Abercrombie said. "His passion for nature, particularly the ocean is well known specifically in the realm of America's Cup sailing," he said.
The deal involves roughly 35,612 hectares of land plus two resorts, two golf courses, a stable and various residential and commercial buildings, lawyers for the seller told the utilities commission in its application.
Ellison plans to pay cash, and the deal should result in new jobs, economic stimulus and a reinvigorated local tourism industry, the application said.
"The buyer anticipates making substantial investments in Lanai and is looking forward to partnering with the people of Lanai to chart the island's future," Castle & Cooke lawyers said in the application.
Lanai is Hawaii's smallest publicly accessible inhabited island, with some 3,200 residents. It is known as the "pineapple island" even though Murdock closed its pineapple operations to make way for luxury resort and home development.
Murdock bought out fellow Castle & Cooke shareholders for nearly $700 million in 2000 and took the company private.
The island boasts unspoiled charm with 48.2 kilometres of paved roads, 643 kilometres of unpaved roads and no traffic lights. Other people own the two per cent of the island's land that Ellison isn't buying.
According to the Hawaii Tourism Authority, more than 26,000 people visited the island from January to April of this year, a 6 per cent decline from the same period last year.
The utilities commission is reviewing the prospective deal because it involves indirectly transferring public utilities Castle & Cooke owns on the island — a water company, a bus and shuttle service, and the island's wastewater utility. Castle & Cooke asked for interim approval by June 26.
Hawaii law requires commission approval to transfer public utilities, and the commission will try to make its decision by that date, said Sean Mikell of the PUC's research division, which is considering the application. The commission does not have jurisdiction over the sale of the island, aside from the transfer of public utilities.
J. Kalani English, a state senator who represents Lanai in Hawaii's Legislature, said he's hopeful the sale will mean a return of agriculture to the island.
"I'm relieved because he's one of the richest people on the planet, which means he knows he'll lose a lot of money in the beginning and he can sustain that," said English, a Democrat.
English said Ellison has been known to vacation on Lanai.