IAWS cancels €64m SWS deal
This follows a dramatic decision by Drinagh Co-op last night to reverse its commitment to the sale of parts of SWS to IAWS.
Drinagh took the decision after discussions between the four West Cork co-ops. IAWS Co-op, which will soon change its name to One 51 to avoid confusion with publicly-quoted food group IAWS plc, said: “Some shareholders in SWS have reversed their previous support for the transaction and, in light of this development, IAWS Co-op has withdrawn its offer.”
Commenting on the decision, the IAWS Co-op chairman Denis Buckley, said: “We are disappointed that, despite our significant efforts, a successful completion to the SWS transaction could not be achieved. Accordingly, we will now continue with the implementation of the IAWS Co-op strategy of creating liquidity and additional shareholder value for the co-op’s members, as unanimously approved at our special general meetings in July.
Philip Lynch, the co-op’s chief executive, played down the blow to his long-term strategy for the group.
“It was just one deal and we are happy we have reached a conclusion. We don’t go where shareholders aren’t at one,” he said. The setback would not upset the group’s plans to go public and to seek a flotation on the stockmarket some time next year, he said.
IAWS will press on, he said, adding that a number of additional investment opportunities in the waste and energy areas have been identified and are being progressed at present. The decision follows months of speculation that SWS management was against the deal because it believed it undervalued the businesses to be sold on to IAWS Co-op.
IAWS had hoped to take the combined assets of the two co-ops to the market next year. The windfarm and waste management arms were key elements in the deal that attracted IAWS. Initially in the battle for control of the assets of SWS, Mr Lynch won support from Dairygold, Drinagh and Lisavaird.
Bandon was understood to be undecided and Barryroe voted against the sale. However the yes lobby was sufficiently large to swing the deal for IAWS.
Under the new strategy the four co-ops want a shakeup of the SWS operations which could see a restructuring of the management team. Proposals that would have given SWS management and other interested parties up to 40% of the equity could be radically altered, to cut the stake available to as little as 10%, it is understood.
Dairygold, who were key players in driving the deal, last night said it was disappointed that the sale had fallen through.
