As Glanbia Co-op wrestles with the decision on whether to buy the plc’s 40% ownership of Glanbia Ireland, there really are only a handful of issues to consider.
Firstly there is the value of the asset, and the price being asked.
The figures have been detailed in our agribusiness pages, so there’s no need for repetition here.
Suffice it to say that it’s up to every shareholder to decide whether it represents good value or not.?
Secondly, and crucially, there are the issues of structure and management. Does the current structure with the plc so closely involved deliver synergies and expertise that will be lost??
Will a farmer-owned Glanbia Ireland deliver a better milk price month-on-month? Better grain prices? What about feed and fertiliser prices?
For dry (dormant) co-op shareholders, a different set of questions pertain.
Most of them won’t have voting rights, but the simple reality is that the course the co-op has set itself over the last decade has well repaid any initial investment.
The succession of spin-outs has delivered some of the see-through value of co-op shares.
There might be a minority who want full or close-to-full see-through value to be delivered to them, but that flies in the face of the co-op ethos.
Glanbia, and before it, Waterford, Avonmore and Premier were all set up by farmers for farmers. The purpose was to deliver self-owned milk processing. If the farmers who milk their cows every morning at the crack of dawn want to regain total control, should any dry shareholder really want to stand in their way?
Glanbia is now the largest milk processor in the country. It is the largest buyer of grain in the country and the largest seller of animal feed in the country. It trades with thousands of farmers, dairy, drystock and tillage. And now the wealth that resides in the co-op gives farmers the option to buy back the mothership, and set the plc free to chart its own course forward, while retaining a significant level of the plc’s shareholding.
Whatever decision is taken, it’s only fair to recognise the extraordinary growth of Glanbia, and see the choices the co-op has as a sign of strength, not weakness.
Perhaps the most contentious issue could be the new name for the Irish business should the deal proceed; the plc will retain the Glanbia moniker. Avonmore anybody? Waterford? Premier? Wexford?