Farmers have sought advice from a leading merchant bank on the possibility of buying out Greencore's €260 million sugar business, but the company denied last night the division was for sale, writes Barry O'Halloran
The Irish Farmers' Association (IFA) yesterday confirmed reports that representatives of the State's 3,800 sugar beet growers had met senior personnel at Dutch group Rabobank - the parent of ACCBank - to explore the possibility of buying Irish Sugar from Greencore plc.
"They have taken a tentative look at the option of buying Irish Sugar outright," an IFA spokesman said.
"It's at a very tentative stage and there may be other parties interested in the business."
NCB analyst Mr Paul Meade echoed those remarks in a note yesterday. He cautioned that any approach from the growers was likely to be a long way off.
Irish Sugar has a book value of €260 million. It is understood that, last year, Greencore considered securitising the business, a move that would have allowed it to maximise cash-flow.
More recently, there has been speculation that it wanted to sell the business, with French player Sucre Union mentioned as a possible suitor. However, a company spokeswoman said: "Irish Sugar is not for sale."
Irish Sugar's valuation is based on the current Irish quota. The Irish Farmer's Journal, which carried the original report, pointed out that a change in the quota or EU policies could affect this.
The news of the beet growers' move came just days after it emerged that Glanbia had been the subject of a similar approach. Fresh Milk Producers (FMP), an organisation representing one third of its 1,400 milk producers, proposed that Glanbia Co-op, which owns 55 per cent of the group, take the business private. Glanbia rejected the proposal.
The IFA last night dismissed suggestions that the FMP and beet growers' proposals were part of a strategy to give farmers more control of production and distribution.
