Glanbia shareholders missing vote meetings
The co-op is the plc’s majority shareholder, and would fund the acquisition by an institutional placing of 102 million of its plc shares, which would reduce the co-op’s holding in Glanbia from 56% to 20%. Because the holding would go below a 51% threshold, under co-op rules, it must be approved by 75% of members at two public meetings, the first on May 10, the second a fortnight later. The deal is structured so both sides would share any uplift in the share price, which has risen from €2.25 to €3.25 in the past year, and recently peaked as high as €3.40.
It is also proposed that half of the 20% Glanbia plc stake, about 28.5m Glanbia shares, be distributed to individual farmers, based on their co-op stake. About 70% of that would go to active farmers, and the rest to 10,000 non-voting co-op shareholders, mostly either retired farmers or relatives.
The farmers of the Avonmore and Waterford co-ops created Glanbia plc in a 1997 merger to raise equity necessary to find new markets for their milk. Now, through the sale of shares and €49.7m in cash, the co-op has conditionally agreed to buy the Irish dairy business, leaving the plc to concentrate on its nutrition and US cheese businesses. Glanbia plc group managing director, John Moloney, said: “In a changed, global dairy-market environment, the time and opportunity is now at hand to recognise and embrace the need for transformation. This transaction provides the prospect of reshaping the business, and unlocking growth and development potential for both the society and the company. For Glanbia, it has compelling strategic logic and creates a focused business with a well-established growth strategy, underpinned by improved financial flexibility. For the society, achieving full control of the Irish dairy and agri businesses will create a dynamic organisation focused on driving growth and development for farmer members.”
Glanbia co-operative society and plc chairman, Liam Herlihy, said: “The last few years have demonstrated that global dairy markets and the Irish dairy sector are in a period of profound change. A unique opportunity exists for the society to build a new strategy, structure, and business model that best serves the interests and needs of our members. In particular, there is an exciting opportunity to expand Irish milk output in the context of emerging changes in EU regulation of the industry. Gaining ownership and control of key strategic Irish assets puts members in an excellent position to capitalise on these changes, and the board of the society looks forward to the successful completion of this transaction and to building a sustainable future for all our members.”
