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Statement of Franklin Mutual Advisers
(April 18, 2002)
The following statement about Farmer Brothers ("Issuer") was
made by Franklin Mutual Advisers, LLC ("FMA"), the manager of funds owning
approximately 9.7% of Farmer Brothers shares, in the Section for Items 4 and 5
of an
SEC Form 13D/A filed April 18, 2002:
FMA believes
that, despite the recent increase in the market price of the Common
Stock, Issuers management can, and should, do far more to realize the value
inherent in the Issuers franchise for all of its shareholders. Management
continues to operate the Issuer in a manner which raises doubts as to
whether
the Issuer is run primarily for the benefit of the management shareholders
rather than in the interests of all of the Issuers shareholders. For
example,
more than 2/3 of the Issuers reported total assets as of December 31, 2001
was
in the form of cash, cash equivalents or short-term investments. Management
has
failed to articulate any coherent strategy behind its move over the past two
years to build up its cash and investments to such proportions or as to why
such
an allocation of resources might be the best way to enhance the value for
all of
its shareholders.
FMA has communicated its concerns over the years to the Issuer without
avail.
Consequently, FMA has determined to sponsor the establishment of a forum
open to
the management and all shareholders of the Issuer with a view to increasing
the
level of communication among all of the Issuers constituencies and exploring
alternative measuers to enhance shareholder value. FMA has arranged for Gary
Lutin to conduct the forum. Mr. Lutin is an investment banker who has
conducted
similar programs in connection with other publicly-held companies. |
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