The completion of the share distribution to members of Kerry Co-op has triggered some questions to the Irish Farmers Journal from Tirlán members about the pace, and size, of the spinout of Glanbia shares from Tirlán.

Comparing at the two spinouts, it is fairly clear that they both were conducted with different goals in mind. When it came to the Kerry spinout of shares, the vote which allowed it to happen was focused on the purchase of Kerry Dairy Ireland and the effective liquidation of Kerry Co-op’s shareholding in Kerry Group.

At Tirlán, the circumstances are different. In common with Kerry Co-op, Tirlán holds a large shareholding in a plc. But Tirlán is a well-established processor, employing in excess of 2,000 people, responsible for processing three of every eight litres of milk produced in the country.

Tirlán is also the largest buyer of premium Irish grains. The co-op announced in August of last year that it was evaluating its holding in Glanbia.

In order to get more flexibility in how it manages its investment, it needed a rule change which would allow it to reduce its holding in Glanbia to zero, if necessary. As part of that vote – held at an SGM in early October – Tirlán said it would spinout 15m shares to members of the co-op. There had previously been spinouts of Glanbia plc shares to members in 2013, 2015, 2017 and 2022.

Members voted in favour of the rule change, in favour of the spinout and also in favour of allowing the board of the co-op having executive power over the balance of the Glanbia investment.

A spokesperson for Tirlán said that when the SGM proposals were announced in September, it was stated that any spinout, if approved, “would take place in the second quarter of 2025” and that Tirlán remains on track to meet this timeline.

They added that as part of the spinout process “we are required to comply with the Glanbia plc closed period, complete a Co-op valuation exercise and engage with the Revenue Commissioners”.

The spokesperson for Tirlán did confirm that the co-op has disposed of no Glanbia shares since the October vote, and reiterated that “all options to manage our financial assets over the longer term for the benefit of our members are being explored through our investment governance structure”.

When asked if Tirlán would allow the establishment of a secondary market for co-op shares, the spokesperson said that the processor “held four share trading events previously in the period 2010 – 2018.

Tirlán Co-op only permits share trade between existing shareholders – it is not a secondary market open to non-members. The purpose of Tirlán’s share trading is to facilitate the transfer of shares from inactive members to active members on a completely voluntary basis”.

Comment

Tirlán members are getting what they voted for in October. The co-op clearly outlined its reasons for the spinout and for keeping the majority of shares back to hold for investments ahead of the SGM.

The vote on the proposal was passed by a majority of 4:1 in October. Those voting were told of the timing and the discretion the board would have in future about managing the co-op’s investment.

It remains unclear, however, why almost eight months is passing between the completion of the vote and the share spinout.

In 2017, only four months passed between the SGM and share spinout, while in 2022, members had to wait nine months for their shares following the SGM vote. Kerry mangaed to turn this spinout around in a few weeks.

The wait until May means that Tirlán members will miss the annual Glanbia dividend payment date.

Using 2024’s Glanbia dividend as a guide, the payment on the 15m shares in the spinout would be worth just over €3m, which equates to about 0.1c/l of milk processed by the co-op. Hardly a huge figure in the overall scheme of things for the co-op, but one which could buy some goodwill if the money was paid directly to members as part of the spinout.