Glanbia restructures for the future

Analysis:Christmas came early for Glanbia plc yesterday when it cleared the final hurdle in a three-stage process to set up a joint venture with Glanbia co-op.

The final Yes vote also means a windfall for farmers, who will get plc shares worth, on average, between €15,000 and €20,000 in return for reducing their shareholding in the listed company.

The 83.35 per cent vote in favour of a deal to reduce the co-op’s shareholding to 41 per cent was slightly higher than the similar vote two weeks ago of 81.8 per cent. It was also higher than the first vote in

the process when 71 per cent voted in favour of the joint venture.

The new venture, known as Glanbia Ingredients Ireland, will see the co-op taking a 60 per cent share in the dairy ingredients business, while also allowing the plc to focus on its growing nutritionals business.

Some 4,522 farmers braved the inclement conditions and turned out to vote at Gowran Park, Kilkenny, yesterday, coming from everywhere between Dundalk and Cork.

To reward them for their attendance, Glanbia staff lined up 8,000 Christmas brunches, which included turkey and ham sandwiches, scones and mince pies.

Shuttle buses were on hand to ferry people from the car parks and take them into 10,000sq m of marquees, the size of 55 four-bedroom bungalows, according to the number-crunchers.

Most of the crowd began to leave at about 2.30pm when the count by the Irish Co-operative Society began, but a few waited to hear the result.

It was expected at about 4pm but, in the event, didn’t arrive until 6.10pm, leading to speculation that the result was extremely close and involved several recounts.

As it turned out, with a vote of more then 83 per cent in favour, the outcome was a resounding endorsement of the deal.

Glanbia co-op chairman Liam Herlihy said he was absolutely thrilled.

“A huge amount of work has gone into this whole process,” he said. “Since last August we have held well over 100 meetings.”

He said the result would be registered with the Registrar of Friendly Societies in the coming weeks.

The share spin-out will then take place and should be complete by next March. Farmers can either hold or sell their shares.

“What is hugely important here is the plc has the opportunity for a proper focus on the investments it will make for the benefit of all shareholders,” he said.