New Glanbia Joint venture

whelan2

https://www.glanbiaconnect.com/news/glanbia-coop-proposes-to-create-glanbiaireland .Didnt someone mention this on here a few weeks ago? What do ye think?

kowtow

whelan2 wrote: »

https://www.glanbiaconnect.com/news/glanbia-coop-proposes-to-create-glanbiaireland .Didnt someone mention this on here a few weeks ago? What do ye think?

I think I'm going to draw myself a Glanbia diagram! What will the relationship be between GIIL and this entity, does this new entity buy milk from the co-op through GIIL or indeed direct from the co-op, for the consumer brands?

Presumably there are going to be a raft of farmer information meetings etc. in the run up to the co-op vote? When will that be held?

My initial reaction though, as with the GIIL JV is that sometimes 40% is a better holding than 60%, everything depends on the detail!

jaymla627

whelan2 wrote: »

https://www.glanbiaconnect.com/news/glanbia-coop-proposes-to-create-glanbiaireland .Didnt someone mention this on here a few weeks ago? What do ye think?

They should be told to take a running jump but like before it will be turkeys voting for xmas....
I see in the fine print they are inserting a clause allowing them to reduce the co-ops share-holding to 28% without a vote, hopefully lads aren't blinded to the fact the Plc is simply trying to dilute the co-ops shareholding to a level where the co-op basically loses all sway within the Plc.....
The 40 million slush fund is a nice touch to sub the Plc some cheap milk down the line

Mooooo

Essentially with glanbia and kerry it looks like coops started, value and products built up, once became plc plan was to take the value and leave farmer with coop and possibly plant and that's it. I guess those that have the value in shares it's there but essentially next generation of farmer will be back at the beginn8ng again?

Doctor Shivering

jaymla627 wrote: »

They should be told to take a running jump but like before it will be turkeys voting for xmas....
I see in the fine print they are inserting a clause allowing them to reduce the co-ops share-holding to 28% without a vote, hopefully lads aren't blinded to the fact the Plc is simply trying to dilute the co-ops shareholding to a level where the co-op basically loses all sway within the Plc.....
The 40 million slush fund is a nice touch to sub the Plc some cheap milk down the line

But as it stands milking members get no price decisions help whatsoever from the CoOp shareholding in the plc and I do agree the so called price support is essentially what you say
Milk and grain prices are decided with plc profits thought of first,nothing else

So what's the point in grand standing to leave the status quo as is?
Most farmers hold onto their shares so ownership is not changed,just the market perception of it
That perception helps farmers because it grows the value of their shares

The road the plc is on,it will surrender its share of GIIL soon (because it's a drag) meaning it's a completely different entity to the plc and independent
Where will the angst be focused then and for what reason ?
As I posted in the chat thread,Glanbia farmers are a progressive lot,they'll take fairer price decisions without screwing the co op

This move on its own changes little for the moment,we're all still going to have decisions mostly influenced by the stronger plc board
It's a move in stages to being a CoOp once more and that's a very good thing in my view

Yurt123

What's gone wrong at Glanbia? I saw in the news this morning that they're using the farmers shares to buy bits and pieces of Glanbia PLC at a cost of €110,000,000 and creating a €40,000,000 "member support fund" which sounds a lot like a slush fund for farmers who banks know not to give out loans to… all this is the farmers own money, there would be no need to have a support fund for the farmers if they would just convert their shares for them

As a Kerry Co Op shareholder I am acutely worried about all this because our own Co Op have €1.7bn worth of our shares and they're talking about buying Kerry Agribusiness off of Kerry Group and pissing away all that much money's worth of shares. We have 28 board members and they're highly dangerous, it's only a matter of time before they pull a similar stunt and all our €1.7 billion worth of shares is gone

kowtow

Too much kneejerk reaction from both sides of the vote already, and the news is only out this morning.

Who is advising the co-op?

What are the future inter company agreements which govern the supply of milk to and through these two joint ventures?

Upon what basis has the proposed newco - "Glanbia Ireland" been valued and how realistic is the business plan upon which that valuation stands?

Get into the detail, with an open mind, and try and make sure you are fully informed (as opposed to strongly opinionated) before the time to vote comes.

It may be that this deal is ok as it stands, but that there are other structural issues which ought to be cleared up or refined at the same time.

Doctor Shivering

Oh I accept your point yurt
But we are where we are

The question is do we want to return farmers control to the businesses or not?
Buying them now is the only way to do that
Buying them is the only way to remove stock broker influence on milk and grain prices
It's also the only way to re position the share funded farmers support payments into a true support and not a plc subsidy
Keeping all resources for the benefit of 'in house' if you like

I see no room for Anger as a motive for decisions at all,just business

Ok there are less palatable aspects e.g. Farmer debt currently owed by the plc coming over to GIIL
But to a certain extent,this is somewhat in my view a move to fix that by moving down a road where fairer decisions are made on price
It's time the debt nettle was grasped anyway and I'd imagine you will see more contras being done down the road where farmers have spin outs equal to their debts
GIIL is a drag on the Plc and I'd say they want rid in stages
They'd probably in my view do it in one swoop if they thought it had support

kowtow

Doctor Shivering wrote: »

Oh I accept your point yurt
But we are where we are

The question is do we want to return farmers control to the businesses or not?
Buying them now is the only way to do that
Buying them is the only way to remove stock broker influence on milk and grain prices
It's also the only way to re position the share funded farmers support payments into a true support and not a plc subsidy
Keeping all resources for the benefit of 'in house' if you like

I see no room for Anger as a motive for decisions at all,just business

Ok there are less palatable aspects e.g. Farmer debt currently owed by the plc coming over to GIIL
But to a certain extent,this is somewhat in my view a move to fix that by moving down a road where fairer decisions are made on price
It's time the debt nettle was grasped anyway and I'd imagine you will see more contras being done down the road where farmers have spin outs equal to their debts
GIIL is a drag on the Plc and I'd say they want rid in stages
They'd probably in my view do it in one swoop if they thought it had support

All makes good sense, can you point to any specifics in the deal that give the farmers back control? The opaque inter-company pricing mechanism and the potential board conflicts seem to be the cause of many headaches, perhaps for no good reason. Will the proposed deal resolve these?

Where did the proposal for the deal originate and whose advisers drafted the heads of terms? The co-op's or the plc's ? - either is OK but knowing that would help people to understand the rationale.

I suspect there are many Glanbia members whispering "fool me once" to themselves - rightly or wrongly - so there is good reason to believe that open hands are needed here the proposal is to gain anything but grudging support from the membership..

Doctor Shivering

There are NO specifics that give back control to farmers
I'm arguing that's the longer game ,this being another stage along the road

We could all huff and puff and say no to the deal but we'd be no better off except we'd not have unlocked some of the plc shares the CoOp hold essentially in trust for us and we'd be further away from controlling our processor

Mooooo

I think glanbia are sending milk to Danone as well, is it the coop selling it or the plc?

cute geoge

What i can not grasp is the co op selling plc shares to top up the price of milk .How does this ad up ,in my book it is similar to a farmer having to sell a site to buy a tractor .Correct me if i am wrong .
Imo farmers voting for this is akin to turkeys voting for christmas

Fixture

Doctor Shivering wrote: »

I hear you
But like I said,the question is what direction do we want to go?
Anger at how this suits the plc that wants rid of agribusiness and milk or anger at how said plc took most of the decisions on price to suit them not us will change nothing
Strategy is what's needed


It's up over a Euro today and why wouldn't it be with great results and a plan to jettison more low margin businesses
Remember farmers still own the shares unless they sell them and those that sell them are hardly in a position to complain about ownership reduction[/quote



Need to see more detail on this proposed deal before I form a verdict. Too soon to rush to judgement.

Doctor Shivering

cute geoge wrote: »

.Correct me if i am wrong .
Imo farmers voting for this is akin to turkeys voting for christmas

I can't comment unless you explain what you mean?
How is it turkeys voting for Xmas?
Selling Agri & milk to GIIL seems like step one offload to me
Selling their 40% step two

Then it's farmer controlled
It's that or the current no say position is my take

kowtow

According to the Irish Times the speculation in the market (the Dublin as opposed to the London market, presumably) is that Glanbia, once rid of it's less exciting elements, is a potential takeover target. That - it says - is behind the rise today.

Leaving aside the fact that Glanbia rose only 6% today out of the 20% odd it has risen since 1st February, I wonder if there is any sense in this. When they describe a "sector ripe for consolidation" I'm not sure if the IT journalists are referring to the Irish milk collection sector or the European dairy processing / food industry.

In any event you'd want to make sure that any spin out price / deal pricing based on shares is at today's close and not that of 1st February. If I was Ernst & Young (who I think are advising the co-op) I'd have tried to structure something so the co-op picked up an adjustment for any volatile move upwards in the plc share price after the "deal". Perhaps they have.

Edit: OK I have it now, there was a note out from BNP Paribas on Reuters suggesting that Ajinmoto (Japanese) might want Glanbia as a once in a lifetime route into Europe, Nutrition and Health.

freedominacup

kowtow wrote: »

According to the Irish Times the speculation in the market (the Dublin as opposed to the London market, presumably) is that Glanbia, once rid of it's less exciting elements, is a potential takeover target. That - it says - is behind the rise today.

Leaving aside the fact that Glanbia rose only 6% today out of the 20% odd it has risen since 1st February, I wonder if there is any sense in this. When they describe a "sector ripe for consolidation" I'm not sure if the IT journalists are referring to the Irish milk collection sector or the European dairy processing / food industry.

In any event you'd want to make sure that any spin out price / deal pricing based on shares is at today's close and not that of 1st February. If I was Ernst & Young (who I think are advising the co-op) I'd have tried to structure something so the co-op picked up an adjustment for any volatile move upwards in the plc share price after the "deal". Perhaps they have.

Edit: OK I have it now, there was a note out from BNP Paribas on Reuters suggesting that Ajinmoto (Japanese) might want Glanbia as a once in a lifetime route into Europe, Nutrition and Health.

If that's the case surely we should be looking at a share deal we ajinmoto. We'd probably get the 40% of gii, the Irish consumer business plus agri for the rob if they got 30% of glanbia without parting with any cash. We still have a valuable shareholding in a large food plc without any of the incestuous bs of the current arrangements.

Fixture

freedominacup wrote: »

If that's the case surely we should be looking at a share deal we ajinmoto. We'd probably get the 40% of gii, the Irish consumer business plus agri for the son if they got 30% of glanbia without parting with any cash. We still have a valuable shareholding in a large food plc without any of the incestuous bs of the current arrangements.

I don't understand this idea. Our co op owns 36% of plc plus we individually own another big chunk. Be how can we do a share deal along the lines above? Surely you'd need to be 100% owner to do that?

kowtow

Fixture wrote: »

I don't understand this idea. Our co op owns 36% of plc plus we individually own another big chunk. Be how can we do a share deal along the lines above? Surely you'd need to be 100% owner to do that?

That's true.

What vexes me is the idea of selling shares in a business, to buy something from that business, selling other shares in the same business to plamass members into signing.

And then watching that business become a takeover target and having fewer shares left to sell.

On the other hand without some sort of unsticking transaction nothing will happen anyway.

A lot comes down to who is driving this, what (if any) is the vision of the co-op board and is that also the vision shared by the membership. They have to drive very hard at this stage to make sure they are doing a deal for their members and their members only, and not be dictated to. If there is a serious prospect that the plc become a takeover target (I don't know whether that is true or not) then the consideration payable could presumably be deferred, in the form of loan notes for example, which - should the plc eventually be taken out at a premium - could be cheaply paid up with fewer shares later on.

Mooooo

Would it be a case of straight up ask8ng what's the 10 year plan going forward as in what's the end game instead of bits and pieces coming?

kowtow

Mooooo wrote: »

Would it be a case of straight up ask8ng what's the 10 year plan going forward as in what's the end game instead of bits and pieces coming?

In a way yes.

Bear in mind the plc can't answer that question - at least directly. If the plc knows anything about being a takeover target there are very specific rules about when it must tell the market, and until then it must say nothing because of insider trading rules.

That's one of the reasons the private / plc hybrid co-op is such a balls - the senior management can, if they choose, hide behind the veil of the plc and tell nobody anything citing market sensitivity. Even within a joint venture board, for example, they may be less than open about matters which affect the plc (which in a case like this can be whatever they want..)

I think the issue here is not with the plc, but with the co-op. Surely whichever way you look at it this move implies a demerger or separation of sorts and with that background the co-op needs to be able to demonstrate (to it's members) that it knows what it is doing and has a real vision for standing on it's own two feet in the future.

It could start by not over-paying for this transaction.

freedominacup

kowtow wrote: »

In a way yes.

Bear in mind the plc can't answer that question - at least directly. If the plc knows anything about being a takeover target there are very specific rules about when it must tell the market, and until then it must say nothing because of insider trading rules.

That's one of the reasons the private / plc hybrid co-op is such a balls - the senior management can, if they choose, hide behind the veil of the plc and tell nobody anything citing market sensitivity. Even within a joint venture board, for example, they may be less than open about matters which affect the plc (which in a case like this can be whatever they want..)

I think the issue here is not with the plc, but with the co-op. Surely whichever way you look at it this move implies a demerger or separation of sorts and with that background the co-op needs to be able to demonstrate (to it's members) that it knows what it is doing and has a real vision for standing on it's own two feet in the future.

It could start by not over-paying for this transaction.

What is to stop the co-op selling it's shares in the plc to whomever it wants to?

kowtow

freedominacup wrote: »

What is to stop the co-op selling it's shares in the plc to whomever it wants to?

Ah.. that it can do, subject to some regulatory clearance.

But if "we" want a part of the business as part of the deal? The third party buyer of the shares can't undertake to sell us the Irish processing business (for example) unless or until he has the control (or agreement) of the plc shareholders. If "our" agreement to sell the shares was contigent upon his delivery of the bits and pieces we'd be acting in concert.

And then we'd be a putative buyer in a takeover. I'm fairly sure that isn't what is intended........ ??

freedominacup

kowtow wrote: »

And then we'd be a putative buyer in a takeover. I'm fairly sure that isn't what is intended........ ??

What would be the problem with this? Once the exit strategy was worked out.

kowtow

freedominacup wrote: »

What would be the problem with this? Once the exit strategy was worked out.

It is just possible that we are restricted from acquiring more shares by one of the previous transactions... but aside from that

Inexperience and lack of funds, I would have thought. Risk to the business of distraction. The co-op would have to act along with a "big brother" .. in other words as part of a concert party... in any such move so it would have to make sure that it got what it wanted on good terms as part of a deal, not least because in such a concert party you can be forced to act and make an offer, and everyone is on the hook for the costs.

That said.. it would be even more important in such a process that the co-op had a very clear idea of what it wanted to get out and build upon in the end.

It comes back to a vision for the future of a co-operative business in Ireland.

My view has always been that a co-op ought to just be a way of neighbours sharing trucks to take the milk where it needed to go to sell, and anything else should be up to farmers to organise themselves.

The current Glanbia set up is more or less the polar opposite of that.

So where do Glanbia members want to go and why?

OverRide

Yes shareholders in the CoOp need to know who is driving the GIIL bus ans where's it going
There needs to be a roadmap,a goal outlined to Shareholders,the owners after all
This carry on of doing bits at a time and not mentioning what the end game is looks like a cod when it needn't be

I'm half thinking that there's no plan for farmers at all
That the plan is just to dump low margin businesses with troublesome activists
That plan now escalated to rid the plc directly of the Brexit sensitive milk business and the debt ridden agribusiness
I think it's been mentioned earlier too that there's a risk the plan is to get the CoOp to take over the debt and put pressure on farmers to sell plc shares to clear debt
They'd be better off assisting debtors in talking to banks

kowtow

I'll confess to not having looked at the papers or the proposal yet, even the bit already published but the more I think of it the clearer the missing link becomes... this is a separation, perhaps a continuation of a separation, and to make good sense for the co-op there is only one test - better prices transmitted to producers.

And here we have to very clearly separate the interests of the shareholder (whether directly or indirectly via the co-op holding) and the farmer / producer, even if for the time being they are the one person. What you may or may not make on your plc shares and what your co-op may make (and give to you from time to time) on the plc shares is neither here nor there. It's a co-op, not a hedge fund, and what matters is a good milk price delivered on fair terms from a reasonably robust balance sheet.

When you strip out the member support nonsense, trickle out of plc shares, loans against loans etc. the GIIL milk price has hardly been stellar. More often than not it has been leading the market... downwards.

The single question the producer must ask of the co-op is how is the new entity going to ensure I get a better milk price, next month and every month? If the answer involves support funds, plc shares, or any of that nonsense then it is no answer at all.

atlantic mist

why doesnt coop buy remaining 40% of gii first, then look at agri business and consumer foods????

be nice for plc to have all irish operations in joint ventures only show increase in the value of the investment instead of profitability in accounts, so we will effectively take control of more business with no transparency on profitability of accounts

are valuations based on a multipal of profitability/turnover, clever to add feed into the fixed price milk schemes now, boost profitability for the period, coop giving rebates on feed and fertilizer which artificially made agri business look better than reality for past two years

end game is coop will be left with irish operations and after take over of glanbia will have no shares or dividends steams and were back to where we were in the 80's

glanbia coop shareholder and i have heard more info from media organisations than our leadership, surely a letter before going to the media is more appropiate

OverRide

Consider this
The CoOp can't sell your shares without a vote
Your CoOp shares in the unlikely event that the plc is ever taken over would have to be compensated back to you for an equivalent value of the proportion of the plc shares they represent (in the same way you get your spin out)

Whether it's accurate or not,(others here might know)for an average share holding of 4500 to 5000 shares that's north of 3 to 400k at today's share price
That would HAVE to be given back to the members

kowtow

OverRide wrote:

Consider this The CoOp can't sell your shares without a vote Your CoOp shares in the unlikely event that the plc is ever taken over would have to be compensated back to you for an equivalent value of the proportion of the plc shares they represent (in the same way you get your spin out)

Except to the extent that they have or will have already been disposed of by the co-op in an exchangeable loan note (trigger around 19€+) or by spin out or to fund a member support scheme, or to buy units from the plc.

OverRide

kowtow wrote: »

Except to the extent that they have or will have already been disposed of by the co-op in an exchangeable loan note (trigger around 19€+) or by spin out or to fund a member support scheme, or to buy units from the plc.

No I don't think they can do those either without our permission
I'll bet the rule on percentage ownership of the plc that we passed is the governor of it
The 100 million instrument last year could not legally compromise that without our say so
There must have been enough value in the leeway we gave them between what shares were sold in 2015 and what shares sold since could bring it down to , to cover the instrument

kowtow

OverRide wrote: »

No I don't think they can do those either without our permission
I'll bet the rule on percentage ownership of the plc that we passed is the governor of it
The 100 million instrument last year could not legally compromise that without our say so
There must have been enough value in the leeway we gave them between what shares were sold in 2015 and what shares sold since could bring it down to , to cover the instrument

Yes I think there was. Sorry - I didn't mean to imply that they could act without a vote, simply that (provided they have such a vote) they can dispose of shares.

There is no inherent concept of compensation for what those shares might be, or might have been, or could be worth in the event of a takeover for example - unless (for example) the consideration for the present transaction is deferred for some time and the timing of share disposal could then be staggered if appropriate. If - and that's a masssive speculative if - there was a takeover of the plc at a premium then fewer shares would presumably be required to pay the consideration for the operating units. I say this without having read any of the terms of the deal so take it with a big pinch of salt.

The devil is in the detail, it's up to co-op members to ensure they are given all of it without varnish or spin.

OverRide

The publicity is out today on Glanbia connect
It seems this is a new JV separate to the existing GIIL CoOp

WTF

The blurb says it gives 60% ownership to Glanbia Farmers and 40% to the PLC
They don't add that in Glanbia farmers experience the decisions are still taken 100% by and 100% to suit the minority plc shareholder

So there's nothing in this for the Glanbia Farmer only the spin out and a replenishment of the cookie jar which is divvied out most to whoever supplies the most milk
A lad sending in a million litres gets double out of the share funded cookie jar than, a lad on 500k
Worse than that it's subsidising the PLC

Is Glanbia Swahili for Zimbabwe or what?

kerry cow

There is nothing for free in this world and you have to wonder is it the plc who wants rid of the farmers or is it the farmer who feel they want control of their own plant , price and sales .
Do the plc really care what happens to THE farmer .
All the goings on in the last number of years is a ply to drag you in and once you are feeling all loved up and appreciated that's when you get your head chopped off .
Beware !!!!
Farmers have a hang up with wanting to own this that and the other .
Plc's don't want low performing assets they look at them as liabilities but when your selling , sure it's a great yoke.
Milk the cows and make you plc work to return you a good plc share asset .
Farmers are using their plc shares to buy what the plc wants to sell them
Like farmer and wife split .One takes the 50 ac tillage field and other gets 60 acres of bog

Fixture

That story about possible interest from Japanese buyer is pure nonsense. Co op owns 36% of plc and that can't be sold without vote.

freedominacup

Fixture wrote: »

That story about possible interest from Japanese buyer is pure nonsense. Co op owns 36% of plc and that can't be sold without vote.

And there's nothing to stop the co-op selling it's entire holding to ajinmoto thereby putting ajinmoto straight into a position to launch a takeover of glanbia plc.

Doctor Shivering

freedominacup wrote: »

And there's nothing to stop the co-op selling it's entire holding to ajinmoto thereby putting ajinmoto straight into a position to launch a takeover of glanbia plc.

A vote would stop it
The CoOp cannot sell below a certain level as determined by the CoOp rules without a vote
Quite apart from the illegality of such an unconstitutional attempt,an EGM sacking the entire CoOp board wouldn't be long getting the required support
And apart from that,No due diligence enquiry from a potential take over would even start because of the Obvious fact that a vote would be needed

This idea that it could happen at all is complete and utter total nonsense ,I don't know why anyone is proffering it,given it's impossible

Fixture

Doctor Shivering wrote: »

A vote would stop it
The CoOp cannot sell below a certain level as determined by the CoOp rules without a vote
Quite apart from the illegality of such an unconstitutional attempt,an EGM sacking the entire CoOp board wouldn't be long getting the required support
And apart from that,No due diligence enquiry from a potential take over would even start because of the Obvious fact that a vote would be needed

This idea that it could happen at all is complete and utter total nonsense ,I don't know why anyone is proffering it,given it's impossible

Correct. Lazy journalism yet again.
Co op Board can't sell down to below 33% without shareholder approval.

kowtow

Doctor Shivering wrote:

This idea that it could happen at all is complete and utter total nonsense ,I don't know why anyone is proffering it,given it's impossible

Are you saying that there are no circumstances in which member farmers would sell into a takeover premium?

I'd be a bit surprised given how easy it has been to sweeten them with spin outs and cash in the past.

I'm not sure that buying the coop shares would be a logical start to a takeover bid, and it would need takeover panel approval anyway quite apart from the EGM. It would also violate the terms of the recent exchangeable loan notes so there would be a bit of housekeeping in any event.

However.. whether the plc is a likely target or not is a perfectly valid question and it makes some sense of the current transaction.

I'm not sure why discussion of it should be dismissed as nonsense here but not elsewhere.

Doctor Shivering

No I'm saying there's none where it could be done without their permission and that if they gave it,they'd have to be see'ing full cash value for their CoOp shares
Glanbia farmers might acquiesce to minor share deals where the spin out is mostly going to them but they're not eejits ready for a hoodwinking so won't agree to a wipe out of their share value
I'd have thought that shoulda be taken as read(red)

Btw don't confuse the plc shares and the CoOp shares

Fixture

Glanbia suppliers in line for €10,000 cash boost in €100m spin-out -
http://farmersjournal.ie/glanbia-suppliers-in-line-for-10-000-cash-boost-in-100m-spin-out-258337

atlantic mist

http://www.independent.ie/business/farming/agri-business/pay-package-of-glanbia-ceo-siobhan-talbot-breaks-2m-mark-in-2016-35486416.html

very few irish companies able to pay such good remunerations, if a takeover occurs wonder how long before the jobs move abroad, sure the coop might re list on stock exchange in a few years

only after buying coop shares and now they are selling a few on me, think ill recieve 500 euro on spin out if i sell shares, talks of linking supply to shares in future, hope our coop have looked at big picture and not just short term gains

hurling_lad

I was a wholehearted supporter of the GII transaction back in 2012 (see here), but I don't see how this transaction is in the strategic interests of dairy farmers.

One red flag for me is how the promotional bumf highlights revenues, investment funding plans etc. for the new "Glanbia Ireland" company which includes the GII operations already 60% owned by the Co-op rather than showing us just the figures for the businesses being purchased.

Henry Corbally's statement reads:

If our Members approve these proposals, we will have two very strong value creating engines for our Members, Glanbia Ireland and Glanbia plc. We will be the majority shareholder in a vibrant, ambitious Glanbia Ireland while also remaining the largest shareholder in Glanbia plc, with a 31.5% shareholding”.

As far as I'm concerned, the Co-op already has "two very strong value creating engines for our Members": Glanbia Ingredients Ireland and Glanbia Plc.

As for the so called 'strategic rationale':

Glanbia wrote:

Strategic rationale

• Building on the successful partnership between Glanbia Co-op and Glanbia plc since the creation of the Glanbia Ingredients Ireland (GII) joint venture in 2012;

Meaningless bumf, imo

• Integration of three strong, well-invested Irish based businesses to create value for all stakeholders;

No effort made here to outline why it is in Glanbia dairy farmers' interests to own an agri trading business or (especially questionable imo) a collection of Irish domestic consumer foods brands

• Maximising the opportunities created by the forecast 30% growth in milk supply by Glanbia’s 4,500 Irish milk suppliers;

Not clear how buying these two businesses will help in the sales of cheese, butter or powders, which is what dairy farmers sell

• Creating one platform for strategic investment. There are currently plans for a strategic investment programme in Glanbia Ireland of between €250 million to €300 million to 2020. This investment programme will increase processing capacity to support the stated growth ambitions of Glanbia milk suppliers and optimise value adding opportunities. The financing of the investment will largely be sourced from dedicated bank facilities in Glanbia Ireland.

I'm presuming that most of this investment is going to be made in the milk processing operations regardless of whether this transaction goes ahead or not. Again, it's not clear how the purchase of these two businesses will benefit dairy farmers given that the Co-op already owns 60% of GII.

I could do with the Plc shares as much as anyone, but I'm going to be voting against this proposal.

kerry cow

I am surprised how gullible the glanbia farmers , who can't see the plc dumping them out the side door with the low margin milk business .
What fools are the farmers up there buying the co op with their plc shares .The plc will be in such a better place once it has off loaded it's drag .
Like in kerry the share will be left to the non farming family members and the milker will be left with low margin co op that can nt sell it product and plc is gone out the gap .
I hope that the kerry farmers keep selling to the plc and keep the plc shares for them selves and not invest in a poor performance sector .
There are guys in glanbia who have used shares and development money to build rotary palours and expanded herds all looking so fancy but the fact is that they couldn't do it on a stand alone operation because as we know the cow business model could not repay it but guys still invest in a poor return on investment area . It's all nuts and bad business selling a high asset to pump in to cows .

OverRide

Money talks I suppose when merchants including Glanbia agri are screaming for it
When they rehashed the GIIL one all they did was increase the spinout basically to get it through and made sure they reduced the required pass percentage when they did the next one
All they need at the meeting now is 60% for it to go through

Will there be information meetings for this one?

I'd agree that UNLESS there's a clear roadmap to where the board are going with this,it's a NO from me
They need to confirm that there is a plan to transfer the GIIL 40% to the CoOp and the rest of the Agribusiness
Full control or else we the Glanbia farmers are being taken for granted


Of course then We need to structure the business so it's performing for the farmers rather than against them
Are our board capable of doing that?

kerry cow

Will the co op management under the final structure of glanbia ireland be able to deliver to the farmer what the farmer hopes for .I am talking down the road when the plc and the top tier power away in the mercs and leave the farmer with their new co op management in place to fend for them selves .I hope it don't go belly up for ye .
Access to the markets for a giant Plc compared to a 100% glanbia ireland are two completely different offerings .
It's heart before brains in this one .

OverRide

Well pre the Waterford Avonmore merger,Waterford CoOp was broke

Fixture

atlantic mist wrote: »

http://www.independent.ie/business/farming/agri-business/pay-package-of-glanbia-ceo-siobhan-talbot-breaks-2m-mark-in-2016-35486416.html

very few irish companies able to pay such good remunerations, if a takeover occurs wonder how long before the jobs move abroad, sure the coop might re list on stock exchange in a few years

only after buying coop shares and now they are selling a few on me, think ill recieve 500 euro on spin out if i sell shares, talks of linking supply to shares in future, hope our coop have looked at big picture and not just short term gains

How many Co op shares did you get?

Keepgrowing

Some talk of Glanbia Plc being ripe for take over, do you think that's likely with the 33% of shares held by one group?

Doctor Shivering

A take over would need the 33% (28 if the current proposal goes through)

That wouldn't be forthcoming without substantial incentive so it's a non runner

A potential hostile takeover though where up to 51% of the shares are bought by Japan is a distinct possibility
Farmers with plc shares would want to hold onto them
You could end up with a predator owning the biggest block,with nowhere for the CoOp or the farming shareholders to sell their share in future
A huge disaster

kevthegaff

Sorry but quite complex to understand. what do farmers own?, private share holders? Just a simple explanation for an outsider:#)

Keepgrowing

kevthegaff wrote: »

Sorry but quite complex to understand. what do farmers own?, private share holders? Just a simple explanation for an outsider:#)

Co op 100% farmer owner, there are some deceased and retired sHolders also

Glanbia Plc owned by Plc shareholders with co op being largest share holder at 33%

GII is a JV between co op and plc owned 60:40 coop/Plc

All other operartion are Plc owned.

The new proposal hopes to create a JV 60:40 co op/Plc and it would control all milk processing, consumer foods and agri business.

This is to run at a 3.2% margin with 50% of profits returning to the coop

Edit: all figures rounded for potted version