Goodbody to advise Dairygold on split
Speculation is rife in the north Cork area that the farmer-owned group is heading for a stockmarket flotation of all, or, large portions of its diverse business portfolio.
In a surprise move on Tuesday the company suspended all trading in co-op shares “indefinitely.”
Goodbody Stockbrokers’ corporate finance department is advising the group on its future financial requirements. Goodbody advises AIB, Paddy Power and Greencore. Dairygold shareholders could be asked to vote on new proposals as early as January.
Shortly after being appointed chief executive of the troubled dairy group in 2003, Jerry Henchy flagged the possibility of floating off the consumer division which requires significant funding to develop into an international food business serving the Irish and British markets.
A spokesman for the co-op urged caution, however, and suggested it was too early to speculate on the likely outcomes of considerations currently being given by the society as to how best it can develop its business.
“While the co-op continues to grow its different businesses, no decisions have been made to justify the range of speculation that is abounding,” he said.
Any decision to turn specified divisions of the co-op into a plc would require shareholders’ approval at a special general meeting.
Dairygold, the country’s largest farmer-owned food company and multipurpose agribusiness, has undergone major restructuring in the past few years.
Businesses have been sold or outsourced and over 825 jobs shed as it cut costs and positioned itself to meet growing challenges in the food industry.
This week Dairygold indicated it may have to close its cheese packing plant in south Wales with a further 115 redundancies.
Co-op secretary Eamon Looney informed shareholders in a letter within the past week that it has suspended the trading of shares pending the options review by the board and management.
It stated that as this process is incomplete, the board has decided it would be inappropriate to conduct the next round of share trading, which had been planned to commence on November 21 and close on December 16.
“Accordingly, the board has decided to close the share register of the society, defer the third round of the share trading process until further notice and that the approval of private transfer of shares between members will be deferred until further notice,” the letter stated.
Dairygold announced last year that it was to create more than 600 jobs with a €30m investment in developing a nationwide network of 30 4Home DIY-Homeware stores.
The chain would include 20 franchise operations and 10 company-owned stores. It has plans to double its current turnover to €160m within the next two years.
To date it has opened a new store in Killarney and rebranded stores in Carrigaline, Raheen and Mallow.
New store developments in Portlaoise and Macroom and Monaghan have also been announced
Alchemy Properties, a subsidiary of the co-op, was set up earlier this year to manage and develop Dairygold’s property portfolio.
The spokesman added there was “nothing remarkable” about the temporary deferment of share trading within the co-op.
It was deemed best practice to defer trading while the board and management of the society are currently engaged in an active review, which will take some time, of the development plans for the different aspects of the business and the corresponding financing requirements for growth and development.
