Shareholders give Glanbia Co-op final approval to sell 10pc holding
GLANBIA Co-op is to sell off some 10pc of its holding in the food group it part owns, after members backed a sale for the second time.
At a ballot in Gowran Park, Co Kilkenny, yesterday, some 82pc of farmer shareholders in the co-op backed a plan for it to reduce its holding in Glanbia plc from 51pc to 41pc.
The historic vote finally removes the co-op's majority ownership of the Plc.
At 4,522, the turnout was slightly down on the first ballot a fortnight ago. Yesterday's vote essentially ratified the first ballot.
The vote clears the way for the co-op to sell off plc shares worth some €224m and will create a windfall worth an average of €15,000 for its members.
The proceeds from the sale will also be used to help finance the co-op's 60pc share in a new milk processing business that is being run with Glanbia plc.
Members also supported a resolution proposed at the special general meeting that would allow the society's holding to fall below 38pc if 66pc of members support it.
The result came as a relief to Glanbia management after a series of heated farmer meetings across the south-east.
The moves are part of a major restructuring of Glanbia's operations in Ireland that has proven to be divisive.
However, in the end, it was a comfortable victory for the 'yes' side with more than 83pc of farmers voting in favour of reducing the co-op's shareholding in Glanbia plc to 41.4pc. The vote needed 75pc approval for it to be passed – combined with the "yes" vote received at the first SGM on November 28. Some 78pc of active milk suppliers also said yes.
As well as the €15,000 windfall for suppliers, ordinary share-holders should receive closer to €8,000. The cash boost will be welcomed by young farmers, in particular.
Glanbia Co-operative Society currently owns 51.4pc of Glanbia plc. However, after yesterday's vote, the co-op will proceed with placing 3pc of the issued share capital of the plc. The share spinout of 7pc of the issued share capital of the plc to members is expected to be completed by March 2013. This means farmers will be able to either hold or sell their Plc shares by next March.
Speaking as he announced the result, Glanbia Chairman Liam Herlihy said the vote concluded "a historic and transformative process".
Group Managing Director of Glanbia plc John Moloney said the process was about "creating value for shareholders".
"From our perspective, it will result in an increase in the company's free float while it will also lead to a strengthening of the balance sheet of Glanbia Ingredients Ireland, the newly created Irish dairy processing joint venture, through the injection of an additional €30m in equity by the joint venture partners."