Members of Glanbia Co-op are to receive a windfall of around €238m, having voted overwhelmingly in favour of a package of proposals geared towards post-quota dairy expansion.
The co-op’s board sought and gained approval for the transfer, via a share spin out, of 10m Glanbia plc shares, valued at around €170m, to all existing members of the society.
The society will also create a €68m members’ support fund through the sale of 4m Glanbia plc shares. The measures were approved at a meeting with members at Gowran Park Racecourse, Co Kilkenny.
These actions will see the release of a portion of the value of the society, directing cash towards members at a time when many are investing heavily in their own expansion.
Glanbia Co-op chairman, Liam Herlihy, said: “The proposals were made at a time of unprecedented change in the Irish dairy sector. Many of our members are in a period of expansion and they clearly felt that this is an appropriate time to make some of the value in the society available to give them both security and resources for growth.
“It is equally an opportunity to recognise the members who have built up the society over many years.”
The co-op will issue shares to facilitate new member applications. It is to buy back 3m existing shares from current members; this will facilitate a voluntary sale mechanism for members who wish to participate in this plan.
The co-op is to sell 4m Glanbia plc shares, equivalent to 1.35% of the issued share capital, and distribute 10m shares to 15,500 members, or 3.38% of the issued share capital.
J&E Davy and Goodbody Stockbrokers will place the 4m Glanbia plc shares in the market immediately.
Once the placing and spin out are completed, the number of shares held by the society will reduce from 121.9m (41.2% of Glanbia plc issued shares) to 107.9m (36.5% of issued shares).
The board will retain the discretion to reduce the society’s holding in Glanbia to 33% in the future.
The board of Glanbia plc will reduce from 14 nominees from the society to 10 nominees in 2016, and eight in 2018.
The society’s representation on the board of Glanbia plc will reduce by one further nominee by 2020.
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