Ringing up the final tally in the often bitter fight for control of the Stater Bros. supermarket chain, an investor group led by former Stater Chairman Bernard R. Garrett has agreed to sell its stake in the Colton company to Craig Corp., one of its former opponents, it was announced Monday.
Craig Corp. of Compton said it has agreed to buy the Garrett group's 1.75 million shares, or about 41% of Stater, for $20.15 million. Craig already owns about 285,000 shares of Stater stock, Craig President Peter M. Behrendt said.
The purchase represents all but 175 shares owned by Garrett and a related voting trust. Garrett was not available for comment Monday.
Lost Earlier Battle
Garrett lost a battle earlier this year with Jack H. Brown, current Stater chairman, chief executive and president. Investor groups backed by Garrett and Brown, who had once been allies, mounted opposing slates of directors at the April annual meeting.
The Brown group gained the last-minute support of Craig, which agreed to vote its shares with the Brown group. At the time, the agreement called for Craig and the Brown group to hold an equal number of Stater shares if the Brown group were victorious, although details were not finalized.
However, the Brown group has the right to buy all but 145,675 shares of Garrett's stake in Stater Bros. under a previous agreement. If the Brown group refuses, then Craig is free to buy the shares, Behrendt said.
Seeking Seats on Board
Brown said his group, called La Cadena Investments, hasn't decided if it will buy the shares. If Craig buys the stock, Craig and La Cadena would own nearly 3.9 million shares, or more than 91% of Stater's outstanding common stock, Behrendt said. Craig is requesting two seats on Stater's nine-person board but has no interest in being involved in day-to-day operations, Behrendt said.
Brown said of the Craig agreement: "It's never done until it's done, but I think the Garrett interests selling their stock in Stater Bros. certainly will enable myself and my management team to devote our full time and attention to serving our shareholders and employees.
"It's a lot more fun to be in our stores than to be in court," he added.