This is a subscriber-only article
Pressure is mounting on Kerry Co-op to engage with shareholders.
The Irish Farmers Journal has seen one letter with names of over 50 shareholders directed to Mundy Hayes, chair of Kerry Co-op, giving him until Friday 16 April to notify the plc that any deal on a buyout would be subject to shareholder approval (see page 39).
If not, this group is threatening to gather 20% of shareholder signatures and call a special general meeting of the co-op.
The Irish Farmers Journal understand a postal vote of any kind has been ruled out by ICOS, given it wouldn’t be able to control fraudulent votes.
As we go to press, there is talk of seeking an injunction against Kerry Co-op completing any deal.
Kerry Co-op bid
Also as we go to press, the Irish Farmers Journal understands that so far there has been no formal acceptance or rejection of the bid submitted last Friday by Kerry Co-op for the milk processing assets of Kerry Group.
Rumours are circulating that unofficially the word has got back to the co-op board that the bid falls short.
At the same time, if no formal communication has been made publicly, both parties could be working on developing the deal.
If Kerry Group declines the bid, believed to be close to €700m, then potentially the deal falls through and Kerry Group is free to deal with a third party.
If Kerry Group accepts the bid, then the co-op board needs to vote on it first, potentially next Wednesday, and then the plc must call for an extraordinary general meeting to ratify the deal.
There is a groundswell of farmer opinion against the buyout deal at this stage after leaked revelations that a full buyout is planned within five years, and that dairy farmers would not have a controlling majority of the new company long term.
Concerns
Seán Lavery, Limerick IFA chair has raised serious concerns regarding the proposed deal.
He said: “It is totally unacceptable that Kerry milk suppliers have not been kept informed or that their approval is not required for a deal which will seriously impact their i ncomes over the next few years.”
Rumours of a Garda investigation into leaking of information by directors last weekend proved false.
Yesterday a spokesperson for An Garda Síochána confirmed no investigation was ongoing.
Calls to sort out the “leading milk price” issue are gathering pace. If this buyout deal falls through, the likelihood is another purchaser will not want this hanging over the deal. Former chair James Doyle is adamant he is going back to arbitration. A solution to the leading milk price issue is likely to take the shape of a further historical milk price top-up on the first five years of the milk supplier agreement, and then a milk price top-up for the second five years of the 10-year milk contract.
Is Kerry Group CEO Edmond Scanlon under pressure to sort this out? Yes, on a number of fronts. A deal would clean up his shareholder base and allow a vision for the future relationship with milk suppliers. If there is no deal, then he will be expected to announce the other parties willing to bid for the business. If there is no vote of the co-op shareholders and the deal is not in their best interests, then he also comes under pressure.
SHARING OPTIONS: