Farmer Bros. Will Open Its Books

By CONOR DOUGHERTY

Staff Reporter

Just weeks after its largest institutional holder demanded its financial records, Farmer Bros. Co. has agreed to open the company books.

The publicity shy coffee distributor made the concession in a letter to Franklin Mutual Advisers LLC, which owns 9.6 percent of Farmer Bros.’ outstanding shares.

Farmer Bros. said it wants to wait until after it files its audited annual report for the year ended June 30, according to officials at Franklin. The annual report is due at the end of September.

Franklin has battled with Farmer Bros. over a host of governance issues for years. Franklin and other shareholders have accused Farmer Bros.’ management of intentionally keeping the stock price down for the estate-planning purposes of its chief executive, Roy F. Farmer.

Recently, Franklin suggested that Farmer Bros. split up its coffee operations from a pool of investment funds that held $226.8 million, or 56 percent of corporate assets, at March 31. Franklin wanted to see Farmer Bros.’ books to find out whether it should be registered as an investment company.

“We’ll see what happens from here,” said David Winters, chief executive of Franklin Mutual, a unit of San Mateo-based Franklin Templeton Investments. Winters said he did not know when or where the inspection would take place. He could not make the letter available, he said.

John Simmons, Farmer Bros.’ treasurer, declined comment. Asked if he could disclose the contents of the letter to Franklin, Simmons replied, “I choose not to.”