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Independent.ie

Saturday 18 November 2017

Heated exchanges over Glanbia's takeover of Wexford Creamery

The proposed €20m purchase by Glanbia Ingredients Ireland Ltd (GIIL) is in doubt
The proposed €20m purchase by Glanbia Ingredients Ireland Ltd (GIIL) is in doubt
Declan O'Brien

Declan O'Brien

It is still unclear whether a simple majority of the 370 shareholders in Wexford Milk Producers (WMP) will be enough to give the green light to the proposed €20m purchase by Glanbia Ingredients Ireland Limited (GIIL) of Wexford Creamery.

There were angry exchanges at two shareholder meetings held last week in Wexford and Ballinaboola where the package was outlined to the creamery's milk suppliers.

Under the proposed deal €20m will be paid in redeemable preference shares in GIIL to the WMP shareholders for their 70pc stake in Wexford Creamery.

A further €2m in cash will be paid by GIIL to buy out the remaining 30pc shareholding in Wexford Creamery from British firm Dairy Crest. However, this will be clawed back from WMP suppliers in the form of a 0.5c/l levy over three to four years.

WMP chairman Marty Murphy admitted that the lack of cash in the deal and the 0.5c/l levy were two of the main points of contention raised at last week's shareholder meetings.

The fact that the defined benefit pension scheme for Wexford Creamery workers was not being covered by the GIIL deal had also been singled out for comment at the meetings.

Describing the meetings as "tough enough", Mr Murphy said management would need more time to explain the deal to shareholders.

"We are in the early days yet and a lot more understanding and a lot more clarity around the proposed deal is needed," he admitted.

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Mr Murphy said management at Wexford Creamery would assess what needed to be done after the information meetings were completed but he maintained the co-op would do "whatever is necessary" to explain the deal to shareholders.

He also confirmed that GIIL boss Jim Bergin would brief Wexford Creamery suppliers at the end of August.

In terms of a timeframe for completing the deal, Mr Murphy said that no firm date was set but he hoped to have the process well progressed by the end of September.

Mr Murphy said ICOS and WMP's lawyers were looking at the co-op's rules in order to confirm the level of shareholder backing the deal would require to be carried. It could require just a simple majority or might need two thirds or 75pc support.

On the workers pension, Mr Murphy said it was a sensitive subject but he insisted that the pension would not be an issue for WMP into the future.

The final shareholder meeting takes place at the Riverside Hotel, Enniscorthy this evening.

Indo Farming