Farm Ireland

Wednesday 21 February 2018

Glanbia Co-op offer expected next week

Declan O'Brien

Declan O'Brien

Glanbia Co-op is expected to lodge an initial offer for Glanbia plc's Irish businesses in the next 10 days.

While co-op sources have consistently said a bid for the Irish arm of the food company would be submitted by the end of this month, it is now set to be made by the end of next week.

Co-op chairman Liam Herlihy recently confirmed that the talks were progressing well and predicted he'd be in a position to go to the co-op's 8,500 shareholders with firm proposals by early next month.

Last week it was suggested in the Irish Independent's Business Week that the co-op was prepared to pay between €380m and €420m for the plc's Irish concerns -- less around €70m for the transferred share of the company's pension fund deficit.

This would put the actual price of the deal at €310-350m.

At current share prices the co-op would have to sell around 110m of its 168m shares in the plc to fund an offer at the higher end of the range, which would still leave the co-op with a 20pc stake in the plc.

Meanwhile, ICMSA president Jackie Cahill has warned that no value should be put on the Glanbia stake in the Irish Dairy Board (IDB) as part of the co-op's offer to buy the plc's Irish operations.

Glanbia's 18.5pc shareholding in IDB is estimated to be worth around €75m. The shares are held mainly by the co-op, with small percentages held by Glanbia Ingredients (Ballyragget) Ltd and Glanbia Ingredients (Virginia) Ltd.

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"Since it has always been held by the co-op, farmers should not have to pay for it," Mr Cahill stated.

The ICMSA leader said it was vital there was a clear understanding of "who owns what" before the final valuation for the plc businesses is put before farmers for consideration.

"Glanbia farmers must be assured that the shares and stakeholding in IDB continue to rest exclusively within Glanbia Co-op, and that the plc has no call whatsoever on this valuable and essential marketing asset," Mr Cahill said.

Irish Independent