By Stephen Nakrosis

Cal-Maine Foods reached an agreement that may see it transition to non-controlled status, which would result in the family of its founder giving up some voting power while maintaining their economic interestso in the business.

The Ridgeland, Miss. company said on Tuesday it entered an Agreement Regarding Conversion with DLNL and its members, which includes the four daughters of founder Fred Adams, Jr., and chairman Adolphus Baker.

DLNL, also known as Daughters' LLC, currently holds the entirety of Cal-Maine's 4.8 million Class A Shares, each of which has 10 votes per share. The shares are convertible on a share-for-share basis into common shares. Daughters' also holds about 1.1 million Cal-Maine common shares, which brings its voting power to approximately 53.2%, Cal-Maine said.

Under terms of the agreement, a process for the potential conversion of all of super voting Class A common stock to Cal-Maine common stock would be created. Should the conversion occur, all of Cal-Maine's shares would be a single class, with one vote per share.

Converting the shares into common stock would not change the controlling stockholder's economic interest in Cal-Maine, which is 12%, the company said. The controlling stockholder's voting power would fall from 53.2% to 12%, according to the company.

A conversion would result in benefits to stockholders, Cal-Maine said. That includes a reduction in the concentration of voting power, a simpler equity capital structure, and broader appeal to investors, many of whom prefer single voting class common stock structures, the company said.

In connection with the deal, Cal-Maine said it approved changes to its charter, and the board plans to establish a fully independent Nominating and Corporate Governance Committee, as well as appoint a lead independent director, upon the effectiveness of the restated charter.

Cal-Maine is the largest producer and distributor of fresh shell eggs in the country. It has a market cap of $4.38 billion, 44.24 million shares outstanding and a public float of 40.81 million shares.

The company also said its board approved a new $500 million share repurchase program.

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

February 25, 2025 18:34 ET (23:34 GMT)

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