The Irish Agricultural Wholesale Society has transferred 19 million shares in IAWS Group, worth more almost €170 million, to its members in a move that sees the society's stake in IAWS fall from 40.2 per cent to just over 22 per cent.
But in a departure that significantly improves the liquidity in IAWS shares and expands its investor base, the members of the society - the State's agricultural co-operatives - placed nine million of the shares with US and European institutional investors - at €8.50 each, a discount of just 3.5 per cent on the previous price of €8.80.
The co-ops realised a total of €76.5 million from the sale of these shares to institutional investors.
IAWS finance director Mr David Martin said that, over the past year, the group had become aware that liquidity was a problem and that many potential investors were reluctant to buy IAWS shares unless they could buy in size. The placing of the nine million shares means that another 8 per cent of IAWS shares are now in institutional hands while some new overseas investors have been brought onto the share register.
It also increases the free float in the shares from 60 per cent to almost 78 per cent.
IAWS chief executive Mr Philip Lynch said: "Today's decision is excellent news and has enabled the plc to further internationalise our shareholder base.
"The liquidity of our shares will improve significantly and this is very much in the interests of the long-term development of the group."
The spin-out of the 19 million shares is one of the biggest-ever share transfers by an Irish plc, only exceeded by the transfer of 13 per cent of Kerry Group from Kerry Co-op to its members five years ago.
The transfer of the 19 million shares is the second time that the society has spun-out IAWS shares to its members. In 1996, the society spun out 12.1 million shares of which 43 per cent are still held by the society members.
This would indicate that the society members are unlikely to be sellers of the 10 million shares they have retained after yesterday's share transfer and placing.
