Some 12,500 members of Kerry Co-operative Creameries are to share in the €94 million spin-out of 10 per cent of the co-op's shareholding in Kerry Group.

The distribution to members of the 5.77 million shares, which were worth €16.30 each at yesterday's close, will cut the co-op's stake in the company by around 3 per cent, to 27.7 per cent from 30.8 per cent.

Each co-op member will get around eight shares in the publicly-quoted company for every co-op share they hold.

Kerry Co-op, which owned around 90 per cent of the Kerry Group when it floated on the Irish Stock Exchange in 1986, has steadily reduced its shareholding by transferring its interest directly to members in recent years.

It previously spun out shares to co-op shareholders in 1993, 1997 and 2002.

In 1996, it received the approval of its members to go below the critical 50 per cent shareholding level and has permission to continue exchanging members' co-op shares for plc shares until its stake falls to 20 per cent.

A Kerry spokesman said the current share exchange had no implications for the company.

However, market sources believe it could help to boost liquidity in the notoriously tightly-held stock over time.

Among those who benefited from the share exchange, which took place yesterday, were a number of the company's directors, including chairman Denis Buckley.

He received 5,383 Kerry shares, worth nearly €88,000 at last night's closing price, as a result of the transaction.

Kerry shares have been under pressure over recent months. In May shares plunged by 10 per cent after the company warned it might not meet profit forecasts for the year.