Tirlán sold 17m shares in Glanbia plc at €13.55 per share, raising gross proceeds of €230.3m. The co-op said it intends to use the cash to finance the repurchase of its outstanding €250m bond, which was due to mature in January 2027.

That bond, which was subject to an interest rate of 1.875%, was issued by Tirlán to help enable the co-op to acquire full ownership of what is now Tirlán.

The co-op is offering to buy back the bond from investors with a 5% uplift, meaning it is paying €1.05 for every €1 outstanding of the bond, taking the total cost of the repurchase and cancellation of the bond to €262.5m.

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Glanbia purchased 7.38m of the shares sold by the co-op for €100m. That transaction was made following approval by the plc’s board to extend the already planned €50m repurchase by a further €50m. Glanbia will cancel the 7.38m shares.

The balance of the shares were placed with institutional investors.

Under the terms of the share sale, Tirlán has agreed not sell any more shares in Glanbia for at least three months after the completion of this sale.

Michael Horan, chief finance officer at Tirlán told the Irish Farmers Journal that the co-op would fund the balance between the proceeds of the share sale and the cost of buying out the bond, which will amount to approximately €30m, from cash.

“Tirlán co-op will be debt free once this transaction is completed,” he said.

‘Prudent financial management’

On the timing of the sale of shares and redemption of the bond, Horan said it is “prudent financial management to manage the bond in good time”. He noted that the sale price of the shares at €13.55 was 10% above the price where Glanbia shares were trading when the bond was issued in 2022.

Horan said that Tirlán will retain 43.5m shares in Glanbia following the completion of the transaction. He said that there is “no other transaction being contemplated at this time which required the cancellation of the bond to be completed”.

Frank Tobin, chief investment officer at Tirlán, who recently announced his intention to retire at the end of November, said: “This is a really positive outcome and places the co-op and its members in an excellent position for future growth and development.

“It is the culmination of a journey since 2012 that has seen us acquire 100% ownership of our business; spin out 63 million plc shares worth €882m to our Members and retain a €610m shareholding in Glanbia plc.”