SWS deal with IAWS moves step closer
This follows last week’s disclosure that IAWS Co-op would fork out a total of €45 million to Dairygold, Bandon, Drinagh, Lisavaird and Barryroe co-ops once the merger deal is completed.
Under the terms, Dairygold would be paid cash of 25m while the West Cork societies would share €20m between them.
At SWS headquarters yesterday afternoon the key players in the merger met to discuss the terms on offer from IAWS.
And the general view is that the deal is acceptable with a minority still holding strong reservations.
They want to explore fully the advantages of staying independent before reaching a final decision.
Those against the proposed merger include some senior SWS executives and Lisavaird Co-op.
Lisavaird still favours independent development under the strong leadership of the existing management.
Concern has also been expressed among SWS executives about future strategy under a merger.
IAWS Co-op has spent €130m taking a 26% stake in NTR Plc, the toll roads and waste management group.
This swoop on NTR was carried out in January and executives in SWS are concerned the NTR move has damaged the original plan for the merged group to be brought to the market at the earliest opportunity.
They fear that big corporate investors will baulk at investing in a group that has heavy investments tied up in third party companies.
An added concern exists as to the future role of NTR in the overall plans of IAWS Co-op boss Phil Lynch, who until 2003 headed the highly successful IAWS Plc, which emerged in 1988 out of the IAWS Co-op.
Having quit IAWS Plc in late 2003 Mr Lynch turned his attentions to developing the co-op again and wants to float it at the earliest opportunity.
That was indicated when IAWS opened merger talks with SWS in March last year.
Difficulties over the 40% stakeholding of executives in SWS delayed the merger talks.
That has since been resolved with the executive holding now cut to 25% of the non-agribusiness end of SWS.
Yesterday’s meeting of the interested parties was seen as a further significant development towards merger.
One source close to the meeting said the deal hasn’t been signed yet and indicated a few more hurdles had to be overcome before there would be any white smoke.
