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The Kerry Co-op AGM last Wednesday saw a barrage of well-orchestrated criticism of the board from the floor. More here.
Most of the speakers were putting forward the idea of a total spin-out of the co-op’s not inconsiderable wealth to the shareholders, a proposal that chair Mundy Hayes is utterly opposed to.
Those speakers represent a vocal group pushing for the effective dissolution of the co-op. For the sake of simplicity, let’s call them the rebels.
The board, in contrast, have been exploring options for the co-op, including the purchase of processing capacity.
As has been well documented, there is an option in place for the co-op to purchase processing capacity, but that will lapse in little more than a year. Let it lapse, say the rebels. Stainless steel would be a terrible investment.
It’s not that the rebels are all dry shareholders either. Many prominent suppliers, and indeed some recent board members, are among their ranks.
There is also disagreement on the vital subject of the tax treatment of any spin-out. The co-op holds that a full-spin out now would se the bulk of the wealth created over half a century fall into Revenue’s welcoming coffers. Not so, say the rebels.
The matter is sure to come to a head. A petition to force an EGM requires 20% of the shareholders and shareholding, very achievable if the rebels have the support they claim. At the back of the room (literally at the co-op’s AGM) are the plc, whose attitude to the co-op is hard to read.
The 13th payment saga has also proven divisive, with claims the co-op will have to sue for peace with the plc before the autumn arbitration. Fake news, say board members.
In the middle ground through all this are the majority of shareholders, who are confused and bewildered as to where the best path forward lies.
Options
Wealth grants options, but also causes rows. The co-op holds 13.7% of the plc, currently worth €2.2bn, about €165,000 on average for the 13,300 co-op shareholders.
Kerry was the first co-op to go plc, the first to go global, the first to spin out vast wealth in the shape of plc shares. Will it now be the first to come to the end point, the total dissipation of the co-op? The strength and unity of the co-op board will be tested.
SHARING OPTIONS: