Greencore weighing up options for renewed bid
Testy EGM puts spotlight on executives' remuneration as Boparan closes in on Northern Foods
Published 01/02/2011 | 05:00
GREENCORE chief executive Patrick Coveney yesterday said his company was still assessing its options before deciding whether or not to improve its merger offer to Northern Foods.
Speaking to reporters after an extraordinary general meeting of Greencore's shareholders, Mr Coveney maintained that no decision had yet been made as to whether his company would try to improve its offer to Northern Foods.
Earlier, Northern Foods adjourned a shareholder meeting that would have seen a vote on Greencore's merger offer. Greencore responded by adjourning a vote on any resolutions relating to the deal at their EGM.
"We are considering our options and will make a decision in due course," Mr Coveney said.
Greencore has been under pressure to make a new bid for Northern Foods, a UK frozen foods business that agreed to merge with Greencore last November in an all-paper deal. That deal now appears to be a long shot after a rival bidder -- UK businessman Ranjit Boparan -- agreed 10 days ago to take over Northern with an all-cash offer of 73p a share, more than a 50pc premium on Greencore's offer.
Mr Coveney, however, refused to admit he regretted not having including some sort of cash element in his company's offer.
"We went with the [all paper] construct because that gave the appropriate balance to all our stakeholders of opportunity and risk and all our meetings with shareholders and employees were extremely positive. Nobody thought this wasn't a good offer when we made it."
He also refused to accept that by putting together the merger with Northern, Greencore has admitted that it requires a strategic partner.
"Our job is to find the right deal for shareholders going forward. We had been doing that for the last number of years, focusing on convenience foods and driving performance of the business. Some markets we are in benefit from more scale and that underpins the rationale for doing the deal with Northern," he said.
Greencore has "no explicit timetable" to decide whether to make a new offer.
Greencore's EGM preceded an annual general meeting that was at times testy as the board of directors came under repeated attack from the floor over their remuneration and the closing of the sugar business in 2006.
Take-home pay for the company's top four executives rose 55pc last year to €4.5m, something that was repeatedly branded "obscene" and "disgraceful" by shareholders who contrasted the pay rises with the falling share price and a dividend that has remained down at 4.5c per share for the last two years.
The closure of the Mallow sugar plant in 2006 remains a sore point for many who repeatedly called on the company to either re-start the sugar production operation or to at least provide the expertise for any company that may want to enter the industry in Ireland.
The fact that directors hold relatively small holdings in the company was also criticised.
"What sort of vote of confidence is it when the board outside of Mr Coveney do not invest in the company's stock?" asked one disgruntled investor.