Co-op milk suppliers to get €25,000 in Kerry Group shares
Published 21/07/2011 | 05:00
KERRY Co-op milk suppliers are poised to receive Kerry Group shares worth an average of €25,000 each after voting in favour of rule change that allows the co-op's shareholding in Kerry Group Plc to drop below its current 20pc threshold.
For the deal to go through, another vote is required on the same issue and this is scheduled for Tuesday, August 16.
The proposal, which was accepted by 79.8pc of shareholders yesterday, allows for the establishment of a new threshold for the co-op of 10pc plus one share -- this represents the minimum holding that the co-op is allowed in the Plc.
Out of an eligible 4,400 'A' grade shareholders -- or active milk suppliers -- 1,638 turned up at the special general meeting at the Brandon Hotel in Tralee, Co Kerry, yesterday afternoon, to cast their vote, which was decided by ballot.
A total of 1,629 people took part in the ballot and there were four spoiled votes.
The proposal was carried by 1,297 in favour with 328 against, which gave the co-op more than the 75pc it required to carry the proposal.
Kerry Group is valued at €4.9bn; the Co-op's 22.8pc stake is worth €1.1bn.
Co-op shares would be converted at a rate of 6.66 plc shares to one co-op share to bring down the co-op holding.
In all, 10 million plc shares with a value of €290m (at Kerry Group's current share price of €29) would be transferred.
This would reduce the co-op's shareholding in the plc from 22.8pc to 17.1pc and hence give the milk suppliers their new Kerry Plc shares worth on average €25,000.
It is also proposed that co-op representation on the plc's board would be cut from seven to four. This will be voted on in September.
Speaking after yesterday's ballot, Kerry's chief executive Stan McCarthy said the turnout was representative of the support for the organisation and the seriousness of the issue.
"You have to take a vote of that nature as a statement of what the majority want and you have to recognise it as clearly stating what they want," Mr McCarthy told the Irish Independent.
Kerry Group's share price closed up 1.57pc at €29.07.