Kerry Group’s main shareholder, the farmer owned Kerry Co-op, placed €77 million worth of shares in the Dublin-listed company on Thursday evening through Goodbody Stockbrokers, according to sources.
The placing will fund a so-called redemption scheme in Kerry Co-op, which has run at times over the past two years, allowing Co-op members to cash in shares in that organisation. This is funded by the Co-op selling shares in the public-limited company.
The sale of about 665,000 shares at Kerry Group’s closing price on Thursday for €115.85 equates to just under 0.4 per cent of the listed company, reducing the Co-op’s overall stake to about 11.7 per cent.
Previous placings for Kerry Co-op under the share redemption scheme, including one in late 2019 that raised €90 million and another last June that brought in almost €78 million, were carried out by stockbrokers Davy. Davy is also corporate broker to Kerry Group.
Sources said that demand for the shares in this week’s placing was very strong among high-quality, long-term oriented institutional investors. While previous placings had taken place at discounts of between 2-3 per cent to the prevailing share price at the time, this transaction was in line with Thursday’s closing price.
The latest share sale takes place more than two months after Kerry Group suspended talks to set up a dairy processing joint venture with Kerry Co-op after discussions broke down. Talks had centred around the Co-op buying a controlling 60 per cent stake in Kerry Group's legacy, low-margin dairy business, which includes popular brands such as Dairygold, Charleville and Kerry Low-Low spreads, but collapsed over price. Kerry Group had been looking for a deal that placed a €800 million valuation on a joint venture.
Meanwhile, Kerry Group announced last week that it is selling its meat and ready-meals business, which is focused on the Irish and UK markets and includes brands like Denny, Galtee, Richmond and Fridge Raiders, to US food giant Pilgrim’s Pride for €819 million in cash.
It subsequently revealed on Monday that it plans to buy US-based preservatives maker Hare Topco, trading as Niacet, for €853 million as it sharpens its focus on its higher-margin ingredients business.
