Only one co-op against IAWS merger
The deal is for Philip Lynch to lose, said one reliable source yesterday. Meanwhile the co-ops will get down to the task of making up their minds in the weeks ahead. Those leaning in favour of IAWS include Bandon, Barryroe and Drinagh, with Lisavaird keen to back independent expansion of SWS.
However, the four have generally acted in unison on SWS and this is a case of preference at this stage rather than serious disagreement. Whatever is decided is likely to be agreed unanimously in the end.
At this stage management's equity stake in the company has been cut from 40% to 25% of the non-agri components of the business.
It remains to be seen also whether all of SWS will merge with IAWS and how that pans out will determine management's new stake in the enlarged business.
Management's 40% stake in the non-agri business end of SWS was a major bone of contention before the merger talks could be initiated. In the end it was cut from 40% to 25% and the episode is reckoned to have upset management's relationship with their co-op owners.
For that reason it is suggested that any desire on management's part to go solo with the future development of SWS may have been undermined by what some of the co-ops regard as over-generous equity stake.
Whatever the state of play, it has been made clear by co-op sources that nothing will be decided until the options have been fully analysed.
While SWS management are highly regarded they are untried compared with Philip Lynch who turned IAWS plc into one of the best performing stocks in the global food market over the past 10 years.
IAWS plc was born out of IAWS Co-op and it floated on the stock market in 1988.
Having struggled for a time in the fertiliser and provender milling low margin businesses, it is firmly focused on par-baked breads and finger foods in key markets including the US and Canada.
Much is being made of Mr Lynch's swoop on NTR plc, the toll road company, which has cost him well over 100m to fund, his supporters believe he has enough clout with the markets to raise the cash required to drive the future interests of a merged IAWS/SWS.
