Glanbia dairy farmers back share sale but crucial vote remains

Glanbia dairy farmers took one step closer to securing a €163m windfall after 81.8% of voters accepted to spin out and sell shares, but another crucial vote remains before the co-op shareholders can cash in.

Voters will return to Gowran, Co Kilkenny, in two weeks’ time on Dec 12 to partake in a second vote as stipulated by co-op rules.

Fears remain that an external factor such as the weather could result in Glanbia failing to achieve the 75% required to pass the share spin-out and sale proposal.

Glanbia Co-op and PLC chairman, Liam Herlihy, said he was hoping for fine weather to make sure that the numbers required to pass the vote turn out.

“It is a huge threshold and it is a huge threshold to be achieved again the next day.

“All I can say is that with the help of God we will have fine weather and that our people will come out and support us and that we can have an orderly and constructive meeting in two weeks’ time just as we had today,” he said.

For the time being, the Glanbia PLC and Co-op are celebrating having achieved the 75% of votes that eluded them in 2010.

Under the rules of the co-op, 75% of shareholders and 75% of milk suppliers had to vote in favour of the proposal which will see the co-op reducing its shareholding in Glanbia PLC by 10%.

That 10% shareholding — valued yesterday at €233m — will be split between co-op share-holders and Glanbia’s new dairy processing joint venture Glanbia Ingredients Ireland (GII).

Shareholders will receive 7% of shares valued at €163m and the remaining 3% valued at €70m will be sold with the proceeds from the sale being used to establish a debt-free cash-rich GII.

A total of 4,649 farmers arrived in Gowran to vote with 81.8% of shareholders voting in favour and 77.1% of milk suppliers accepting the proposals.

Glanbia group managing director, John Moloney said it was a good day for co-op shareholders who are being rewarded for their commitment to the PLC, while he said that the PLC had achieved its objectives.

“From the PLC point of view the big strategic issue has been achieved which was the securing of the joint venture.

“Really this is about potentially some liquidity, but it is liquidity only in technical term, that assumes that the farmers are going to go out and sell the shares and in my view that hasn’t happened, and won’t happen, as they tend to be long term shareholders.”