THE PROPOSED sale of Glanbia’s Irish dairy division to its 54 per cent shareholder, the Glanbia Co-op, has been narrowly defeated yesterday by co-op members at a meeting in Kilkenny.
The deal, which had required a 75 per cent majority in order to be passed, was supported by 73 per cent of co-op members. The motion was defeated by 80 votes.
Some 8,000 farmer co-op members were entitled to vote in the ballot, but only 4,060 were at at Kildalton College, Piltown, Co Kilkenny, yesterday. Of these, 2,970 voted in favour of acquiring the Irish dairy and agri-businesses, while 1,097 voted against.
The members comprised two categories of shareholders, dairy and non-dairy. Both groups averaged a Yes vote of 73 per cent.
Co-op chairman Liam Herlihy insisted yesterday there was “no plan B” in terms of putting the proposed deal to the co-op members again. While there was no legal impediment to proposing another deal, the company respected the decision of the co-op members. This meant that no proposal would be on the table for “the foreseeable future, the next couple of years”, a spokesperson added.
Mr Herlihy said the company had assembled the very best team of advisers including KPMG, William Fry and pension advisers to put the best plan forward to members. “There is no other deal on the table.”
Visibly disappointed, he said the board fully accepted and respected the result. “Seventy-three per cent was an incredible level of support,” he said. “We would have been disappointed and devastated if we had got something like 50 or 60 per cent.”
The result of the ballot was announced after the markets closed yesterday evening but will be seen as a blow to the listed business. The proposed deal had been perceived by analysts as an extremely positive move for the company. Disposing of the Irish dairy division would have allowed the company to pursue its global cheese and nutritional business, the company’s main driver of growth in recent years, as well as allowing the plc to strengthen its balance sheet by significantly reducing its debt.
The company is due to release an interim management statement today. In a statement yesterday, group managing director John Moloney said the company expected to deliver good first half results. The operating environments had improved considerably, which was benefiting the group’s outlook for the year.
“We continue to focus on strong cost management and on the ongoing rationalisation programme to achieve sustainable cost competitiveness, particularly in the group’s Irish business.”
Mr Herlihy said the Irish unit continued to be a very strong part of the businesses. “Glanbia is an outstanding organisation – both its businesses in Ireland and overseas.”
A company spokeswoman added that the focus would now be on the business. “The farmer issue has now been dealt with. Tomorrow the focus will be on the business. The same people will be in place, working on the same issues.”
