Glanbia in talks over Irish dairy unit sale
Published 10/03/2010 | 10:51
Glanbia Plc rose the most in two months in Dublin trading after the food group said Glanbia Co-operative Society Ltd expressed an interest in buying its Irish dairy operations.
The Co-operative Society, which owns 55pc of Glanbia, is likely to significantly reduce its stake in Glanbia should a deal go ahead, the Kilkenny-based company said today in a statement.
Glanbia advanced as much as 5.4pc, the biggest percentage gain since January 5.
The dairy unit includes Glanbia’s dairy ingredients, consumer products and agribusiness divisions, the statement shows.
A deal would also give the Co-operative Society Glanbia’s business services unit, property division and Irish joint ventures.
A transaction would increase Glanbia’s focus on its international nutritional ingredients and cheese businesses.
“While discussions are progressing well, there is no guarantee that they will result in a transaction being concluded,” Glanbia said in the statement.
Separately, Glanbia said net income rose 44pc to €112.7m in 2009, as it benefited from a one-time gain linked to changes to its pension plan.
Pretax profit before one-time items fell 19pc to €97.4m.
“Whilst the outlook remains challenging, we are seeing some positive signs in our operating environment which should underpin our performance in 2010,” the company said in the statement.
Glanbia said earlier this year that earnings may rise 6pc to 8pc in 2010.
“We expect that the market will view these as a strong set of results and anticipate a positive share price performance, driven by the positives attributable to the disposal of the Irish Dairy business,” analyst Liam Igoe at Goodbody Stockbrokers in Dublin wrote in a research note. Goodbody has an “add” rating on the stock.
Glanbia rose as much as 14 cents to €2.74 in Dublin and traded at €2.66 at 8:42am, giving the company a market value of €781m.