Shares in Kerry Co-op are valued at close to €664 following the latest window of the share redemption scheme. Just over 1,500 shareholders in Kerry Co-op submitted applications for the second window of the cash for shares scheme in November.

On Thursday last week, Kerry Co-op sold about 800,000 of its shares in Kerry Group plc at a price of €112.50 per share. One Kerry Co-op share equates to about 5.9 shares in Kerry Group plc.

The €90m raised from Kerry Co-op’s share sale will be paid out to the 1,514 shareholders in Kerry Co-op who applied for the most recent share redemption window. This means the average payout to shareholders in Kerry Co-op who applied for the scheme will be just under €60,000.

Range

However, there is a huge range within this average. At the lower end, some shareholders have cashed in just one or two shares (valued at €664 to €1,330), while at the higher end there are shareholders who have redeemed several thousand Kerry Co-op shares and are set to be issued cheques for millions of euro. According to Kerry Co-op, all cheques will be issued in the first week of December.

The latest share redemption window now values a single share in Kerry Co-op at just under €664.

There’s probably 500 to 600 C shareholders that have fully redeemed all their shares

Speaking to the Irish Farmers Journal, executive secretary of Kerry Co-op Thomas Hunter McGowan said the majority of applicants to the share redemption scheme are B and C shareholders.

The different shareholder categories are described as follows:

  • A - active farmers.
  • B - farmers who have retired or stopped supplying milk in the last five years.
  • C - non-farmers.

    • “Over 90% of applicants are B and C shareholders. And the vast majority of people who completely redeemed all their shares in Kerry Co-op are C shareholders,” said Hunter McGowan.

    “Between this window of the share redemption scheme and the last one back in June, there’s probably 500 to 600 C shareholders that have fully redeemed all their shares," he said.

    Hunter McGowan added that shareholders in Kerry Co-op could now see the true market value of their shares.

    “The most important thing is that people who have Kerry Co-op shares now have an understanding of the real value of the shares. There was no real value on these shares up to now.

    "A lot of small shareholders in Kerry Co-op have cashed in their shares because this is a very easy way to cash them in. If you have 10 or 15 shares in Kerry Co-op, this is a simple way of redeeming them rather than going through a broker,” said Hunter McGowan.

    Leading milk price

    Meanwhile, Kerry Group and Kerry Co-op’s leading milk price committee is continuing to make progress around the contentious leading milk price issue.

    On Thursday last week, both sides met for discussions for a second time, with the negotiations described as “very constructive” with a lot of positivity and engagement from both sides.

    “We had a very constructive meeting again last week,” said McGowan. “There was good engagement on both sides. Things are still at a very sensitive stage, but we continue to make progress,” he added.

    Both sides will meet again on Monday 2 December to continue negotiations. In September, an independent arbitrator ruled that the four west Cork co-ops should be included in determining the leading milk price on a like-for-like basis.

    Kerry Group has spent recent months carrying out an analysis to determine what the leading milk price is for 2015 milk on a like-for-like basis. While the negotiations between Kerry Group and Kerry Co-op relate to 2015 milk, the final agreement will likely have implications for milk supplied in 2016, 2017, 2018 and 2019 by Kerry dairy farmers.