Swensen’s to Merge With Hobson’s

Swensen’s Inc., a troubled ice cream manufacturer with 340 ice cream parlors and restaurants worldwide, said Monday that it will merge with Hobson’s International, a Santa Barbara ice cream company.

In a complicated transaction, the owners of Hobson’s will first buy 1.5 million of the 2.4 million shares of Swensen stock owned by Karl Eller, Swensen chairman and principal shareholder, for $2.1 million, or $1.40 a share. Eller is the former chief of Combined Communications, now part of the newspaper publisher Gannett Co. A company controlled by Eller acquired Swensen’s in 1980.

In addition, Hobson’s owners will pay Thornberry Holdings $3.6 million for 2.8 million shares of Swensen preferred stock plus Swensen warrants giving Thornberry the right to buy 4 million common shares. Thornberry, a Texas company, bought the shares in March for $3 million. Hobson’s owners, San Francisco investment banker Kimun Lee and Alan M. Levine, a New Jersey investor who is also Hobson’s president, then will buy Swensen shares from the public for $1.40 a share. Swensen’s shares recently traded over-the-counter at between 75 cents and $1 a share.

Finally, Swensen’s will buy Hobson’s for 3.2 million Swensen’s shares.

Arnold Yellin, a Hobson’s senior vice president, declined to answer questions about the company or its plans.

Swensen’s, based in Phoenix, has lost money for three consecutive years and has blamed its performance on stiff competition. In 1985, Swensen’s lost $3.97 million on sales of $10.8 million.