Does Meelin ballot offer a message?
Published 07/09/2010 | 05:00
In light of the shareholder vote in Meelin last Thursday evening, it appears that Kerry Group's pitch for Newmarket Co-op is likely to get the green light.
The proposal seems to have the overwhelming backing of the co-op's shareholders, with 357 of the 439 who turned out to vote giving the package the thumbs up by agreeing to change the co-op's rules so that Kerry Group can proceed with an offer to buy the entire share capital of Newmarket.
This effectively gave the deal an 81pc approval rating, with the rule change vote getting significantly more than the 66pc needed to be carried.
However, on discussing the vote with a wise old owl from the dairy sector, I was struck by an observation he made on the ballot.
He pointed out that, while just 19pc had come out against the deal, the fact that 82 shareholders voted 'No' was in itself significant.
He said that as those against the Kerry offer are primarily active Newmarket milk suppliers, it would be fair to assume that the vast bulk of the 82 'No' votes came from this group.
Given that Newmarket has less than 140 milk suppliers, this means that close to half of the co-op's active dairy farmers are opposed to the deal.
This assertion may be dismissed as conjecture since we will never know the identities of the 82, but it is difficult to see many 'dry' shareholders kicking the Kerry offer to touch when the average payout amounts to almost €39,000 -- and they have no worries regarding a lower milk price into the future.