Kerry deal may go ahead without member approval
The Kerry Co-op shareholder redemption scheme may be introduced even if it is not approved by shareholders at the Special General Meeting (SGM) tomorrow.
Kerry Co-op recently sent its members an information pack about a voluntary cash-for-shares scheme which gives shareholders the opportunity to sell. Members were able to apply for the scheme until June 5.
The SGM will be held as soon as possible after the AGM in the Brandon Hotel in Tralee.
According to the notice of a SGM issued to shareholders and seen by the Farming Independent, a resolution to add the share redemption scheme to the rule book will be voted on at the meeting.
However, Kerry Co-op chair Mundy Hayes told the Farming Independent that the board has the authority to introduce the cash-for-shares scheme without a vote from its shareholders.
"The board has the authority to bring in this scheme. It has to be addressed at board level. The board has approved it and has the authority to introduce it. The board has to front up and make a decision on it," said Mr Hayes.
The document states that the rule change would ensure that the shares in Kerry Group plc required to fund the share redemption scheme will be retained for that purpose and give assurance to shareholders that the scheme will be available for all.
The document also explains that it will also have the effect of ring-fencing 96.5pc of the Kerry Group plc shares held by the Kerry Co-operative Creameries Ltd for redemption through this or future schemes.
Another key resolution is to consider, and possibly pass changes to the rule book to remove, the requirement for Kerry Co-op to hold 10pc plus one share in Kerry Group plc.
A third resolution on changes to modernise the rules of the society to reflect changes in law in recent years will also be considered.
Members of the Kerry Co-op Shareholders Alliance - who want the co-op to sell its remaining 13.7pc stake (€2.2bn) in Kerry Group Plc and share the dividends, worth on average around €165,000, among co-op shareholders - have urged members to reject the share redemption vote next week.
Alliance members said that the proposed scheme is the "least tax-efficient" option available as shareholders who choose the scheme would have to pay 55pc income tax rather than Capital Gains Tax.
"It is the least tax-efficient scheme and won't suit any dairy farmer. I would urge every dairy farmer in the area to vote no to the scheme," said Alliance member and Listowel dairy farmer Dave Scannell.
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