Collapsed Glanbia dairy deal may be revived 'in four to six weeks'
GLANBIA's co-op will decide whether to revive their collapsed €350m offer for Glanbia plc's Irish dairy business within the next "four to six weeks", co-op chairman Liam Herlihy said yesterday.
Mr Herlihy, who also chairs Glanbia plc, was speaking after the annual general meeting of the plc, where several shareholders aired their views about the proposed deal.
The co-op, which owns 54pc of the plc, had offered to buy out the plc's Irish dairy business for €350m so it could be run by farmers for farmers, leaving the plc to focus on its higher margin international business.
The deal collapsed on May 10, when its approval rate fell two percentage points short of the 75pc required by the co-op's rules.
Mr Herlihy yesterday appeared to rule out any change to the co-op's voting structure, telling plc shareholders it was important to "abide by" and "cherish" a structure that had been put in place to protect the co-op. But he signalled clearly that while the co-op's original bid was dead and buried, a "post-mortem" was being carried out which could result in a further offer.
"I said there was no Plan B [on the night of the vote] and there is no plan B today, but we have a clear mandate to have discussions with our members and it's right and proper that they take place," Mr Herlihy said.
Those discussions are expected to take "four to six weeks" Mr Herlihy said.
Plc chief executive John Maloney said that while he would "reflect on" any further co-op offer, it would be "premature to prejudge" what the outcome of that reflection might be.
The commentary came after several plc shareholders used the AGM to share their views on the collapsed deal.
One said the plc should have "been able to make a sweeter offer", given the buoyant state of the plc's other divisions, while another pointed out that farmer shareholders were "fairly secure" in the plc "set-up".
"I've spent a long time watching farmers running their own business and they haven't been very successful," he added. "I wouldn't be rushing for a Plan B." A third shareholder said that when people voted for Glanbia to become a plc many years ago "we never knew we'd have to pay €350m to get our co-op back". "That's just my opinion, but I can't understand it," he said. Mr Herlihy agreed to take the three points as "comments".
Speaking after the meeting, he stressed that he had "no regrets" about pursuing the dairy deal, even though the vote fell, while Mr Maloney insisted the lingering prospect of doing a deal with the co-op would not be a distraction for the plc.
Both men also pointed out that the costs of the aborted deal would be significantly less than first anticipated. The plc had pencilled in a cost "north of €6m" but the actual amount will be "less than half" that since the deal hasn't gone through. The corresponding figure for the co-op, meanwhile, will be "much lower" than the €3m to €4m cost of completing the deal.
- Laura Noonan
Irish Independent
