Co-op could bid €350m for Glanbia

GLANBIA Co-op could offer to pay a net figure of up to €350 million to buy the Irish assets of Glanbia Plc.

News of the deal, which requires 75% backing from the co-op’s 8,500 shareholders, was dismissed a “speculative” by a spokeswoman for the Plc yesterday.

If successful it would result in its 55% holding in the Plc being cut substantially to possibly under 25%.

Chief executive of the Plc John Moloney has described the proposed sale including the Irish dairy operations, consumer foods and the agribusiness as a “win win” for both sides.

Shareholders of the co-op will be asked to endorse the move at an extraordinary general meeting sometime in May.

Up to €70m of a pension deficit will transfer across under the terms of the deal which puts the gross value of the offer at €420m.

The markets have reacted favourably to the proposals since they were first announced in early March and shares in the group are up by about 25%. Glanbia shares closed up 5.5% yesterday at €3.32.

If the deal happens, the co-op’s stake in the Plc would probably go below 25% from its current level of 55%. That could leave the group open to a possible takeover bid at any time after that.

It will also free the group to develop its overseas operations, especially those in Europe and the US, without looking over its shoulder at the co-op.

Nutritionals are seen as a huge growth market in the years ahead and Glanbia is already building a strong footprint in that sector in the US with a takeover of €150m in value likely within the next 12 months to further deepen its presence in that expanding end of the food sector.

The latest information suggests a concrete offer could be put on the table for the Irish business before the end of the month and a deal could be signed off in months.

Last night a spokeswoman for Glanbia Plc said “no offer” has been put to the group for the Irish businesses at this stage. Though talks are progressing, the talks have not reached a point where a price has been indicated to the group.

The figures in the public domain “refer to analysts’ estimates”, she said.

Once the offer has been made the co-op will then embark on a major push to sell the deal to farmers.