Glanbia's vote
Crucial vote meetings loom later this year for Glanbia Co-op Society’s 7,768 members with voting rights.
Describing the proposal to be put to them, society chairman Liam Herlihy said: "Now is the right time to evolve the existing society and plc model which was introduced in the quota era that began almost 30 years ago.
This joint venture will enable the society, on behalf of all members, to gain a direct 60% ownership of assets that are critical to milk production and expansion.
It will create a sustainable platform, post milk quotas, for a projected 60% growth in milk output by 2020.
"Both the JV and share spin-out proposals deliver tangible benefits for all members."
The society recommends to members to vote yes for a 60% (society): 40% (plc) joint venture in respect of Dairy Ingredients Ireland (DII), Glanbia plc’s Irish dairy processing business.
The society’s 60% stake will be part funded by the sale of 3% of the issued share capital of Glanbia plc, of which the society is currently the 54.4% majority shareholder.
A further 10% share spin-out and sale of the society’s shareholding in the plc would enable 7% to transfer directly to society members (worth about €122m), while 3% (worth about €52m) would be sold by the society to inject additional equity into the joint venture, and the remainder would be retained in the society’s balance sheet.
The share spin-out and sale are contingent on a successful joint venture vote. If they are approved, the society would remain by far the largest shareholder in the plc, with a 41.4% interest.
Both the proposed joint venture (simple majority) and the share spin-out and sale (75% majority) will be subject to votes by A1 and A2 society members. A yes vote to the joint venture will enable a vote on the spin-out and sale.
Liam Herlihy said, "Our proposal is to develop a robust post quota dairy model that provides a structure for growth that is more aligned to the dairy processing and milk production requirements of our members."
Key information on the proposals is being circulated to society members. A third main category of society shareholders, A3 members, will not have a vote, but enjoy full equity entitlement to society shares.
Source: irishexaminer.com