Farmer Brothers Adopts 'Poison Pill' Plan
By STEVE SILKIN - 3/16/2005
Los Angeles Business Journal Staff
Torrance-based coffee
distributor Farmer Bros. Co. has adopted a "poison pill" plan that would
make it harder for an acquirer to pursue a hostile takeover.
The stockholder rights plan, filed Wednesday with the Securities and
Exchange Commission, would be triggered if any party acquired more than
15 percent of company stock. That would lead to the issuance of added
shares, making it difficult for any one shareholder to take control of
the company. Family members, who now control about 39 percent of the
company’s stock, could hold up to 45 percent without triggering the
rights plan.
Farmer Brothers did not say whether or not the plan was established
to ward off any specific takeover offer.
Gary Lutin, who has been managing a shareholder forum on the Farmer
Bros. matter for the past three years, said this and other takeover
defenses the company’s management has established were evidence that
management is not protecting shareholder interests.
“Instead of the board doing something to improve management, they
establish takeover defenses to block anybody else from doing so.”
Farmer Brothers officials did not immediately return a call.
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