Egg Firm’s Stock Sale Will Give Family 61%

The largest shareholder of Olson Farms Inc. is to acquire a majority interest in the Sherman Oaks-based company, one of the state’s largest egg distributors, under a $6.75-million agreement announced Monday.

In agreeing to sell 500,000 shares of stock for $13.50 a share to C. Dean Olson and two of his children, Olson Farms rejected a competing bid for the stock from an investment company controlled by Anaheim-based Winn Enterprises.

The stock sale, which is scheduled to be completed May 13, would increase the holdings of Olson and his immediate family to 61% of the company. The family previously owned 42.8% of Olson Farms.

“They had effective control before but they didn’t have absolute control,” said John W. Buffington, chairman and president of Olson Farms.

Suit to Block Sale

Buffington said the offer from the Winn affiliate, Southwest Overthrust Oil & Gas Co., was turned down largely because it was lower, at $13 a share. He said the rejection of the offer did not stem in any way from a suit Olson filed April 25 in Los Angeles Superior Court to block the sale of stock to Southwest Overthrust.

Olson said Monday that he would drop his suit against the companies and other parties that were connected with the proposed purchase.

R. Sam Christensen, an executive vice president with Southwest Overthrust, said his company would not challenge the agreement between Olson Farms and Olson.

“As far as we’re concerned, it’s over,” Christensen said.

Changes in Board

Olson said that, as a result of the agreement, “There will be some changes made in the board and the direction” of Olson Farms.

He declined to discuss the planned changes further, other than to say that he hoped to expand the plastic products operations of Olson Farms. Buffington said the company is considering replacing its plastics plant in Wenatchee, Wash., and expanding its plant in Dallas, Texas.

Olson and his family can now name only five of the company’s 11 board members. With the new stock, however, he will be able to name six directors, giving him a majority.

In the over-the-counter market Monday, no shares of Olson Farms’ stock were traded. The lightly traded issue closed Friday at $13.

Brother’s Holdings

The second-largest block of stock in Olson Farms is controlled by the family of H. Glenn Olson, who is C. Dean Olson’s brother. The holdings of H. Glenn Olson and his son, Richard Olson, will amount to roughly 12% of the company once the stock deal is completed next week.

H. Glenn Olson and Richard Olson, along with the other directors of Olson Farms, were named as defendants in the suit that C. Dean Olson filed to block the sale of stock to Southwest Overthrust.

Besides supplying fresh and liquid eggs, Olson Farms makes plastic egg cartons and cartons used by fast-food restaurants. It also makes plastic meat trays used in grocery stores. Olson Farms’ egg business provides the largest share of its revenues, but its plastics business is growing at a faster rate, company officials said.

Olson Farms employs 1,200 workers overall, including 60 people in Sherman Oaks, where the company operates its corporate headquarters and the administrative offices for its plastics division. Olson Farms earned profits of $1.04 million, or 96 cents a share, on revenues of $146.6 million during 1984. Its affiliated companies chalked up another $100 million in revenues last year.

Olson Farms and its affiliates operate farms and have interests in farms in California, Utah, Idaho, Washington, Hawaii, New Mexico, Texas and Arkansas. The California farms are in Riverside County and San Bernardino County in Southern California and in the Gilroy area in Northern California.