Some resistance is emerging to the proposal for Glanbia Co-op to buy the plc’s 40% share in Glanbia Ireland.

Questions are being asked about the price, the value of the deal as share price falls, the timing and the process.

The west Waterford regional committee is one of 11 in Glanbia’s co-op structure.

Last week, the committee overwhelmingly called for the co-op vote to be delayed until March/April to allow the many concerns they have raised to be dealt with.

“We’re not against the buying of the plc’s 40% in Glanbia Ireland, but the timing is wrong,” said Cappagh farmer Tom Power.

He and a number of Waterford dairy farmers and dry shareholders from the area listed their concerns to the Irish Farmers Journal.

The share price

Shares were worth €14 on 10 November, the day the buy-out proposal was made public.They have fallen by almost €2/share in the fortnight since, and currently stand at €12.14, down 20% on the €15.12 of 4 November.

The lower share price is, the more the co-op will have to borrow to fund the deal.

Dungarvan farmer Aidan Ahern said: “The current chair opposed the 2010 deal for the co-op to buy Glanbia’s Irish business largely because the share price was undervalued, leaving the co-op paying too much for the business. By that logic, this is not the time for the co-op to be selling its plc shares.”

We used to hear that the magic figure was €20/share, added Tom Power: “That was meant to be a trigger for the co-op to move on buying out Glanbia Ireland. We’re far from €20 now and the share price is going in the wrong direction. This deal is getting worse by the day.”

Investment fund

The farmers are also opposed to the setting aside of 4% of the co-op’s shareholding in the plc as an investment fund at the board’s discretion.

“Investment opportunities should stand on their own two feet,” said Ahern. “The board having 7% (3% is already at their discretion) to spend is too much.”

Dry shareholders

“When my co-op needed support, I invested in it,” says dry shareholder John Carroll. “The shares I hold weren’t easy bought back 40 years ago. I think the dairy farmers of today should be backing their co-op, maybe in a revolving fund.

“I’m not looking for full see-through value for my shares like they have in Kerry,” Carroll added, “but we deserve better treatment than we are getting with this proposal after a lifetime of loyalty to the co-op.”

Process and pace

“If we’re doing this, we have to do it right,” said Power. “Rushing this through in a month, with a virtual SGM, makes no sense. COVID-19 restrictions are a challenge, but if this is the right deal for the co-op, it’ll still be the right deal in March or April.”