The board of Golden Vale plc is expected to renew negotiations with its parent co-operative on the sale of its Charleville milk processing operation, but on different terms from those rejected by the plc board at its meeting last Friday.

The board is understood to be considering offering the Charleville milk processing plant alone to the co-operative and retaining the liquid milk plant, Lansdowne, in Limerick, which was part of the rejected deal.

The co-operative had offered £22 million (€28 million) for the Charleville package, following the announcement earlier this year by the plc chief executive, Mr Jim Murphy, that he intended to dispose of the facility, which mainly produced butter and skim milk powder. The other possibility is a phased buy-out by the co-operative of the whole asset. This would allow the plc to hold a stake in the milk processing outfit which, given current improved world markets for dairy commodities, would give it an ongoing profit margin. At a meeting of co-operative members last week, Mr P.J. McGuane, a member of a subcommittee which had formulated the £22 million offer, complained that insufficient information from the plc had been made available to the co-operative.

A member of the subcommittee, who did not wish to be named, said yesterday that "it isn't in our interests to fight with each other. If the relationship which exists with the plc is to be unravelled, it has to be with the agreement of the farmers".

When Golden Vale Co-operative members opted for a plc, a document was drawn up governing the powers of the co-operative vis-a-viz the plc. Inserted were conditions which gave the co-op certain powers of veto over the plc board's actions. Ironically, the co-op holds only 0.2 per cent of shares in the plc.

For example, the assets of the co-op, book valued at £40 million, cannot be used as collateral to guarantee borrowings in any acquisition by the plc without the authority of the 77-person co-operative board. And the plc must get the same committee's permission to dispose of any of the co-operative's assets. In this situation, the plc's two million shares count for just one vote, whereas the 4,000 individual milk suppliers each have one share in the co-operative.

Such assets include the milk processing plant, Golden Vale head offices, the Lansdowne dairy, all the stores and two large farms. The assets of the plc and businesses acquired since going public include the cheese spreads and processed cheese businesses, Bailieboro in Co Cavan and all the Northern Ireland businesses.

The plc board comprises 14 farmers, two executive directors and two non-executive.