Glanbia Co-op shareholders seek delay to key vote on €307m deal

Glanbia Co-op, which owns 60% of Glanbia Ireland, proposes to buy the remaining 40% stake in the dairy products division from Glanbia Plc in a transaction valued at €307m.            

A number of Glanbia Co-op shareholders have written to the co-op and to the stock market-listed Glanbia Plc, saying that a key vote on Friday over a key €307m deal should be postponed.

The co-op members are due to vote on the deal that will see the co-op buying out the 40% stake the plc owns in a business called Glanbia Ireland, which includes some of Ireland’s best-known consumer brands, including Avonmore milk, Premier milk, and Kilmeaden cheese.  

The Glanbia Ireland business generates €2bn in annual revenues and is Ireland's largest milk processor. It employs around 2,000 people at 11 plants and also operates farming retail outlets.

The co-op vote on the deal will mark a huge resetting of the dairy industry in Ireland, as the plc looks to lessen its direct links with the co-op dairy operations. The co-op also owns a 32% stake in Glanbia Plc.

The proposed Glanbia Ireland deal was first announced in November. Glanbia Plc subsequently told the stock market this month that it had been informed by the co-op that the co-op had the cash and debt facilities at hand to pay for the proposed deal. The plc said the transaction was “not contingent” on the co-op diluting its 32% stake in Glanbia Plc.

However, in the signed letter, which has been seen by the Irish Examiner, co-op shareholders Michael Veale and Jim Dempsey, both from Co Waterford, question whether co-op shareholders are paying too much.  

Headed as a “Letter of Concern”, the shareholders claim co-op members have been given too few details and are seeking to get the vote at the special meeting on Friday postponed.  

They also claim the price tag was valued by KPMG some time ago. They say that what they call “an independent valuation” had put “a lower valuation of between €176m and €185m” on the transaction.

The letter goes on to claim that the Glanbia Co-op board “is essentially a farmer board, hugely experienced at farming, but with limited experience of big business”.

The shareholders also claim that the different classes of co-op shareholders have not been fully informed about the proposed deal.

In response to questions, the Glanbia Co-op told the Irish Examiner that KPMG had as independent advisors carried out a strategic review for the co-op and subsequently advised the co-op on the transaction.

KPMG had access to all of Glanbia Ireland’s accounts and strategy documents, allowing them to arrive at a full, informed view of the business, and therefore advise on negotiating the price for the 40% shareholding," the co-op said. 

"At the start of the strategic review process, Glanbia Plc members sitting on the board of Glanbia Co-op recused themselves from their positions." 

The co-op also reiterated that "the funding to complete this proposed transaction is not contingent on the sale of Glanbia Plc shares owned by Glanbia co-op" and that meetings for Co-op members had been held.   

Separately, the Irish Creamery Milk Supplier Association, or ICMSA, had said it was recommending Co-op members to approve the Glanbia Ireland translation at Friday’s vote.

ICMSA president Pat McCormack said in a press release earlier this week the association was recommending that the Co-op take Glanbia Ireland “under the full control”.

Mr McCormack had said that “following numerous meetings with Glanbia Co-op, ICMSA now believes that sufficient flexibilities are available to the Co-op in terms of funding the proposal and taking account of stock market developments”.