Newmarket members to get €40,000 on Kerry takeover
Published 04/09/2010 | 05:00
SHAREHOLDERS in cheesemaker Newmarket Creameries Co-op are set for a windfall of almost €40,000 each after they cleared the way to sell the co-op to Kerry Group.
At a special general meeting on Thursday night, 81pc of the shareholders voted to change the co-op's rules in order to allow the takeover bid to proceed.The rule-change had required a two-thirds majority.
Last month, Kerry offered €421 a share for Newmarket, putting the 680 shareholders in line for a payment of some €39,000 each. The deal values Newmarket at €26.6m and Kerry will also take on debt of about €5.9m.
The shareholders have until September 10 to return letters of acceptance that were sent out by Kerry when it made the initial offer. Newmarket said that Kerry's bid was at the midpoint of a valuation that was carried out for them by Pricewaterhouse-Coopers.
The approval process has been complicated by the fact that a number of the Newmarket shareholders are deceased, but that is not thought to be a significant barrier to any deal going through.
The deal is pending regulatory approval, but that is not expected to be a problem.
Last year, Kerry had to go to the High Court to overturn a Competition Authority decision banning the purchase of Breeo, but, unlike Breeo, Newmarket does not have any brands competing with Kerry products and is already an established cheese supplier for Kerry. Newmarket also supplies cheese to the Irish Dairy Board.
Newmarket has invested heavily in its manufacturing facility in recent years, and it now has an annual manufacturing capacity of about 35,000 tonnes.
Last year the co-op posted a profit of €746,000 on the back of turnover of more than €56m. It is estimated to have made between 15,000 and 20,000 tonnes of cheese in that year.