It was smiles all around at Tirlán Co-op last Friday, when news of the vote result emerged. The Dealer wonders if chairman John Murphy and his CEO Seán Molloy were still smiling when they woke up to the reality of the decision on Saturday morning?

Essentially, Murphy and his board now have well over €600m of Tirlán Co-op assets in Glanbia plc at their disposal and have been given a mandate by the membership to invest it as they see fit.

Since the end of 2021, the board had permission to invest about €220m worth of plc shares in other ventures, but chose not to. The logical conclusion is that the board couldn’t find a suitable investment, or else felt €220m isn’t enough and it needs three or four times that to buy something substantial.

The problem is the world is awash with money and there are more private equity investors than there are entrepreneurs, or at least entrepreneurs with a sound business model that will yield a decent return.

The plc shares are delivering around €25m back to the co-op annually in dividends, which is worth about 0.8c/l in milk price.

To get that up to 2c/l, the co-op would need a dividend payment of €62m annually. If the investment yields a 10% return, it could spend €620m on it and everyone would be happy.

But you can’t shake a few bushes and expect a 10% return to fall on your lap.

The risk now is that whatever business is purchased will have already been rejected by other investors.

Not only that, but the risk is that the board will be so preoccupied with buying a golden goose, it could lose focus on the bread and butter business – or should that be cheese and butter?

New CEO Seán Molloy won’t be in a hurry to rush into something as he has time on his hands, but Murphy has been chair now for four years, so there could be a temptation to leave a lasting legacy while he’s still in that seat.

Another man looking to leave a legacy is Hugh Maguire, the new CEO of Glanbia plc and Siobhán Talbot’s replacement.

Plc performance

If plc performance is measured in share price, Glanbia performance is middling. Its sports nutrition business is booming, but the low margin US dairy processing business is a drag on returns.

It has long been suspected that the plc would love to offload the US cheese plants, like it did in Ireland in 2023, but is only holding on to them to secure the whey – the key ingredient in sports nutrition.

Will a sweetheart deal be negotiated between the former couple to keep both sides happy? Tirlán could buy the dairy plants and give Glanbia first dibs on the whey?

Tirlan has three members on the board of Glanbia, including John Murphy who has served almost 14 years on both boards. Which horse do these three directors ride if such matters are discussed in both rooms?