SHARES in Glanbia surged back over €8 yesterday as the co-op that part-owns the public company wrote to shareholders asking them to back the proposal to sell down part of its holding.
On Tuesday the co-op sold 3pc of its shares in Glanbia PLC, reducing its holding to 51pc.
The co-op will hold a ballot next Wednesday on whether to allow it to sell another 10pc of its shares, and it has written to all society members calling on them "to participate and vote again for the proposal, to realise the benefits of its PLC ownership through a €224m share spin-out and sale".
Co-op chairman Liam Herlihy said the next vote was a "very important" one for shareholders. The move is part of a joint venture between the co-op and PLC to spin out the company's milk processing business into a new joint venture that is split 60:40 between the two companies.
Last week more than 70pc of Glanbia milk suppliers supported the co-op's participation in the plan.
Under the joint venture plan, a new milk processing plant will be built at Belview Port in south Kilkenny. If next week's proposal passes, the co-op will finance its part of the deal by selling the PLC shares. If the proposal fails, then the co-op is likely to take on significant debt to finance the deal.
"This is a very important proposal which has the full support of all your board members who are united in their recommendation for a 'yes' vote from all eligible members," claimed Mr Herlihy, who cites three other reasons for a 'yes' vote:
• To create a cash-rich society with greater financial flexibility.
• To reinforce the new joint venture's balance sheet with an extra €30m start-up funding.
• Retain majority board representation, chairmanship until at least 2020 and a valuable 41.4pc stake in the PLC for the future.