Tuesday 24 April 2018

16,000 farmers enjoy windfall after €172m Glanbia deal

Liam Herlihy: holding at €1.2m
Liam Herlihy: holding at €1.2m
Glanbia has announced a new record-breaking milk price for August supplies
Cormac McQuinn

Cormac McQuinn

MORE than 16,000 farmers will receive a windfall of shares in a €172m share deal at dairy giant Glanbia.

While most farmers got shares worth an average of €11,000 each, the 'spin-out' deal has seen some get considerably more.

Glanbia Co-operative Society distributed about 7pc of its holding in Glanbia PLC to its farmers last month.

An examination of the company's share register reveals that chairman Liam Herlihy's holding has jumped from €788,500 to almost €1.2m in the space of two weeks.

And three other farmers have benefited to the tune of almost €1.5m between them.

Glanbia, based largely in the south-east, has expanded internationally in the past decade and its lucrative cheese business in the United States is one of its main drivers of growth.

The company's share price has skyrocketed from €1.87 on December 2, 2008, to an all-time-high closing price of almost €9.50 last Friday. The share spin-out is part of plan to fund the establishment of a new processing company, Glanbia Ingredients Ireland.

Records show that Mr Herlihy received almost 40,000 new shares in the deal, worth more than €340,000 on March 20.

Increases in the company's share value in the week that followed meant his total shareholding had increased by just over €400,000.

Mr Herlihy did not respond to a request for comment. A Glanbia spokesman said the company "does not comment on individual shareholders".

The spokesman said that the spin-out resulted in the pro-rata cancellation of the member's shares in the co-op. Essentially, the co-op shares were converted to shares in the PLC that could be sold to the benefit of the owners.

Major beneficiaries who spoke to the Irish Independent expressed their satisfaction at the spin-out.

Dungarvan dairy farmer Diarmuid Horgan (66) saw the value of his shareholding grow from just over €1m prior to the spin-out to more than €1.5m on March 27.

Retired farming couple James and Eleanor Richardson, from Co Waterford, saw their holdings increase by about €460,000 to almost €1.6m since the deal. Mr Richardson (79) said it would be "incorrect" to say he had "made a killing". It was a form of pension for farmers who, he said, were "asset rich but they don't plan for their retirement".

Another Waterford farmer, Anthony Broderick, saw the value of his share, held with his wife Anne, grow by more than €450,000 since the deal. He said he was happy to get the shares.

All three pointed out that the shares represented the fruits of decades of investment and hard work with the various co-op businesses that have been amalgamated into Glanbia.

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