Kerry Group's bid to acquire Newmarket Co-op got a boost today after shareholders at the Cork-based co-op voted in favour of a rule change which allows the PLC to proceed with an offer.
The percentage of the vote was 81 per cent in favour of the rule change and 19 per cent against. Overall, 429 members voted last night at last night's special General meeting (SGM) with 357 voting in favour and 82 against.
Kerry is paying €421 per share, valuing the business at €26.6 million. In addition the company is also acquiring debt of €5.9 million plus transaction costs.
Co-op members are expected to net between €38,000 and €39,000 through the deal.
The purchase is subject to regulatory approval.
Newmarket Co-op has 680 shareholders, 150 of whom are milk suppliers. Under the deal, which contains no milk price assurances, milk suppliers are being offered an allotment of 5,694 additional shares worth €1 each based on milk quota held by suppliers to Newmarket in the 2009/2010 quota year.
Newmarket has been a major supplier of cheese to Kerry's branded cheese business since Kerry took over Golden Vale in 2001. In addition it supplies large volumes of cheese to the Irish Dairy Board.
Turnover at Newmarket was €56.6 million in 2009, with the co-op posting profits of €746,000 last year. The co-op has invested approximately €17 million in its cheese-making plant at Newmarket in the past two to three years. The plant has manufacturing capacity of up to 35,000 tonnes, but is currently running at about half of this. It is understood that Kerry intends to increase production at the plant.
In addition to its high-end manufacturing plant, Newmarket also owns the SuperValu shop in the town of Newmarket.