Glanbia frees up €238m for members
The proposal is subject to member approval, and will be voted on by eligible members at a Special General Meeting in mid-May.
Announcing the proposals, the co-op chairman, Liam Herlihy, said: “The Board of the Society is making these proposals in the context of a period of unprecedented change in the Irish dairy sector.
“The Society is in a very strong position, owning 60% of Glanbia Ingredients Ireland, the country’s leading and most progressive dairy processor, as well as a further €2 billion of assets through its shareholding in Glanbia plc.”
It is proposed to transfer 10 million Glanbia plc shares, valued at about €170m, to all existing members, and to create a €68m Members’ Support Fund through the sale of four million Glanbia plc shares.
An additional objective of the proposals announced is to strengthen the relationship between co-op society shareholding and milk supply.
This will be achieved by facilitating the application by milk suppliers to the Glanbia Group to become members of the society, through the issue of up to three million new shares in the Society.
Other suppliers who meet the qualifying criteria may also apply for membership through this initiative.
The Society will also initiate a share buy back plan to purchase up to three million existing shares from current members, thereby facilitating a voluntary sale mechanism for members who wish to participate in this plan.
The proposals include amending rules to reduce the minimum Glanbia Co-op shareholding in Glanbia plc from the current 38% to 33%.
Liam Herlihy said: “Many of our members are in a period of expansion and the board believes this is an appropriate time to make some of the value that has been built up in the society available to those members, to provide resources to support growth.
“It is also an opportunity to give value back to our loyal members who have built up the society over many years.”
If the proposals are approved by members, the number of Glanbia plc shares held by the society will reduce from 121.9 million (41.2% of Glanbia plc issued shares) to 107.9 million (36.5% of Glanbia plc issued shares).
The Society Board will also retain the discretion to reduce the Society’s holding in Glanbia plc to 33%.
Under current agreements, the composition of the Board of Glanbia plc will reduce from 14 nominees from the Society to ten nominees in 2016, and eight in 2018.
If these proposals are approved, it is anticipated that the Society’s representation on the Board of Glanbia plc will reduce by one further nominee by 2020, bringing the number of Society nominees on the board of Glanbia plc to seven.
The society will hold a number of shareholder information meetings in the coming weeks to discuss these proposals with members.
In February, Glanbia Co-op paid a €32m bonus to 6,200 milk and grain suppliers.
A fund equivalent to about 1 c/litre has also been put in place to insulate Glanbia dairy farmers against the threat of lower milk prices in 2015.
It is drawn from the dividend the Co-op receives from Glanbia PLC.
