Delisting proposal ‘not acceptable’

COUNCIL members of Glanbia Co-op were told yesterday that the proposal to delist the company was unacceptable.

Chief executive John Maloney met with council members yesterday afternoon to explain the nature of the offer to take the group back into private ownership of the co-op.

“The proposals to take the company private was not a runner,” he told the 90-member council.

The position has not changed “it wasn’t a runner yesterday and it isn’t a runner today”, he said.

He also dismissed suggestions that the approach by the 30% of milk suppliers who were former suppliers to Premier Dairies, now part of Glanbia, was that the board of the co-op should look at the possibility of taking the company off the stock exchange.

They have not bid for the company and are not in a position to make a bid.

The co-op has already rejected the suggestion of buying back the shares in the plc for a number of reasons.

If the milk suppliers were intending to make a bid then that would be an entirely different matter, Mr Maloney said.

They requested only that the board of the dairy co-op consider buying back the shares of the plc not owned by the co-op, which amounts to about 45% of the total equity.

That deal would cost €400m and the milk suppliers said the interest repayments could be funded from the dividend currently paid to shareholders in the plc.

That makes up about €7.6m and would only fund €100m of the €400m, a company spokesman said.

It appears the milk suppliers like other dairy farmers are concerned by falling milk prices and take the view that as a co-op they would do better in terms of the price paid to them for their milk.

They are due to face another cut in the price per gallon this year and regard the delisting option as a way around that dilemma.

In the light of recent events, the council, which appoints the board of the co-op, were briefed yesterday to keep them fully informed.

They are not involved in the move and have not been a party to the move by the suppliers.

Meanwhile, two top food analysts have also rejected the proposal as unworkable.

Paul Meade and Liam Igoe of NCB and Goodbody Stockbrokers said the proposal was impractical and would cause serious financial difficulties for the group, if implemented.