Following is a summary
of recent Forum progress relating to the development of strategic
alternatives for Farmer Bros. shareholders:
Prospective strategic
relationships:
We have been proceeding with the explorations of parties selected by the
Chapman Group,
the food industry investment banking firm engaged to advise shareholder
interests, to determine their potential interests in acquiring or
otherwise assuming responsibility for management of the Farmer Bros.
business operations. As indicated in my
November 18, 2005 Forum Report, we intend to choose one of these
parties to work with exclusively in the development of a proposal for a
transaction, based on who can most effectively manage the company's coffee
business to generate value for shareholders and career benefits for
employees. Current discussions suggest that we will be able to make that
choice before the end of this month.
As also indicated in my
November 18 Report, we are deferring
explorations of interests relating to the company's real estate assets
until we define strategic objectives for the business operations. However,
as reported below, we have initiated a demand for information that we know
shareholders will need to determine the value of the real estate.
Information
requirements:
As previously reported, the company's current management has rejected my
October 28 request for cooperative responses
to investor information requirements, insisting that we follow the
burdensome processes of formal demands under state laws that compel
management's provision of records. The required formal demand was
therefore presented this past Friday afternoon to obtain information
shareholders will need to evaluate the company's real estate assets. A
copy of the shareholder Delegate's demand letter has been posted on the
Forum web site:
Demand for Information about
Company's Real Estate Assets
http://www.shareholderforum.com/farm/Process/20051209_letter-Delegate.htm
Investment
Company status: The recently
reported court decision in the SEC's case against National Presto may
be expected to support SEC action to enforce compliance with the
Investment Company Act of 1940 in the similar Farmer Bros. situation, as
suggested in a January 8, 2004 Forum letter.
This could require separating management control of the company's coffee
business operations from control of the company's $170 surplus funds,
possibly through a spinoff or cash distribution. Speculation about this
prospect may have contributed to last week's 10% increase in the company's
stock price.
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Your questions and
comments on these or any other matters concerning your investment in
Farmer Bros. will be welcomed.