Glanbia spinout 2021/2

whelan2

What do you think https://www.glanbiaconnect.com/news/glanbia-co-op-proposes-to-acquire-full-ownership-of-glanbia-ireland

wrangler

I'll be glad to get rid of the old shares , they were only tradeable in a spinout.

I don't think Glabia shares are worth what they're making, i could see them dropping in value

jaymla627

https://www.boards.ie/discussion/2058217286/glanbia-spinout-2021-2

Lads need to vote it down, if only to get the plc to lower the asking price, after their messing with the peak supply issues, and the fact I wouldn't believe for a second they will return a better milk price, way to much bloat and high paid lads doing sweet f**k-all throughout the co-op, pension liabilities going forward are more then likely eye-watering aswell, that the plc will be glad to wash their hands off.....

What's the scenario where the new plant if it goes ahead re funding it and ownership, the share spinout is buttons to be honest at 10k, will buy you 10 ton of urea at present if you could source it, it really isn't enough of a carrot

Timmaay

My business background and education is extremely limited, so alot of that article I do not understand nearly well enough, however I'll spell out my take, in regards to what a co-op should do for its members (who collectively own it), is collectively negotiate and return the best possible prices. That's where everything started originally with Glanbia right? Then Glanbia became a big successful international company?, To which us farmers traded in some (all?) of the co-op elements for just shares in the Glanbia PLC? And then the Glanbia co-op division (is it actually a co-op or just another company??) was spun out, except now all us farmer are signed up to a MSA with Glanbia, so this spin out Glanbia co-op has zero choice other than accept whatever price the Glanbia PLC buys the milk at? So basically it seems to me that us farmer have both given up any control of our milk price, and we have given across all the added value element that the Glanbia PLC has (because certainly the Glanbia plc shares have returned nothing like what the Kerry shares did to the farmers there?). Anyways please explain to me what I'm wrong on in the above? And I still really don't understand what this 100% spin out will achieve for the farmers??

jaymla627

https://www.boards.ie/discussion/comment/118145345#Comment_118145345

All that lads need to remember is that it's mostly the same board members that championed the joint-venture are again pushing this, the only thing is this time, the few prominent cheerleaders that gave great speeches at the last vote have now waken-up and realised they where had, the sheer economics of glanbia been 1-2 cent behind on milk price yearly compared to other co-ops has left alot of us down 6 figure sums of cash when it's all added up since the joint venture started, 11k spinout is buttons in the grand scheme of things

Its a spin out of plc shares converting some of your co op shares to plc which you can sell

There will be a vote on this that will include giving you the plc shares and selling some the Coop hold to pay for buying the remaining 40% of glanbia Ireland off the plc

Each coop share you hold represents some plc shares the coop hold on your behalf

If you hold less than the average 3700 shares held by milk/grain suppliers,then you will get pro rata less than the €11000 worth of plc shares in the article

2000 Co op shares might only get you 7000 euros in today's prices worth of plc shares

There are a lot of larger coop shareholders who skew that average figure upwards

Owning 1 share gets you the same vote on the proposal as owning 10000 coop shares

You will pay 33% tax if you sell

So 9000 euros of plc are really probably only worth 6000 to you unless you have previous cgt losses to write off

Mooooo

Plc want rid of the low margin capital intensive part of the business namely the milk processing. Value has been extracted? Is now in the form of the plc and its this generation of farmers left with what remains

GrasstoMilk

Did anyone get the report the “beyond the parlour” group commissioned Tom Barry to do on Glanbia financials Former head of AIB

Mooooo

https://www.boards.ie/discussion/comment/118145455#Comment_118145455

If this went thru and farmers don't sell whatever remaining plc shares they have after conversion how much of the plc would farmers own?

https://www.boards.ie/discussion/comment/118147529#Comment_118147529

Well north of 55%

atlantic mist

was against the original spin out and im against this one two, it overvalued and it wouldnt make any difference to milk/grain price

danone had to write down 50% of nigerian exglanbia arm due to overpaying glanbia due to crazy valuation

the whole management team and board took their eye off the ball and made a mess of supply issues as a result of poor planning for new cheese factory, it seems they seem to spend to much time worrying about how to extract as much cash for them selves instead of concentrating on running the business

with current high prices we have mountains in stores i couldnt figure out how they were returning such a good price but it makes sense now....butter me up more please

the coop want to take out a loan to purchase 50% of glanbia ireland....why would we do this??? interest rates going to go up!!!

if were about to stand still re milk growth due to enviromental and processing issues...ie no growth....and plc is expecting 8-12% expected growth on a consistant basis YEARLY then why not hold plc shares into the future and buy back irish processing when glanbia hit the 25-30 a share....whats the hurry,

Pinsnbushings

Again I'm no expert but I see no benefit to this other than older farmers with large coop shareholdings cashing in and the tasty fees for your kpmgs etc involved in all the paperwork.

I may be wrong but could glanbia ireland even diversify its product range or add value, or will everything be sold to the plc. Can't see how milk or grain price will improve. There is some investment fund to be set up aswell, unless the thinking is they buy bitcoin or something and prop up milk price with the profits ha..

Its of no use unless the guaranteed margin voted in at the last spin out is revisited in favour of a transparent mechanism whereby glanbia pays a leading milk price combined with safe guarding the milk divisions cash flow

Glanbia can borrow at AAA rates,so I'm not worried about that

They get their money at less than 1 % (they charge their farmers 23% interest merchant credit btw..thats some margin)

This ,they re financing through a share sale mainly,the result of which being the Coop shareholding will be approaching Kerry levels at a share price of only 10% of Kerry's ?

Its going to be difficult to block when it only requires 60 odd per cent of the milk votes

whelan2

https://m.independent.ie/business/irish/farmers-will-pay-over-the-odds-for-glanbia-ireland-says-report-41039806.html

Gman1987

Sale price looks to be at circa. 10 times earning for the PLC's 40% share. GII have being paying farmers roughly €0.01c/l less than other coops, On 3 billion litres that adds up to €30 million Euro, 40% (PLC share) of this is €12 million and multiply this x 10 (Sale price is roughly 10 times earnings) gives €120 million. So is the sales price over inflated to the tune of €120 million?

kevthegaff

The complexity of the whole spinout says enough to me, quite like milk price breakdown. Another tool to fool to poor farmer

It does look like a last smash and grab raid on the golden goose to me which is why I'm minded to vote No this time

whelan2

No positive replies yet, are we being raided?

Tileman

Talking to a few farmers locally over past few days and not one of them intend to vote yes. They see absolutely no benefit in this.

think the co op might have underestimated this one

jaymla627

https://www.boards.ie/discussion/comment/118157593#Comment_118157593

They have lost an awful lot of goodwill the past few years since the joint venture, the icing on the cake was where they looked after the big boys with extra milk for the peak months while the smaller suppliers where in the main treated like dirt

https://www.boards.ie/discussion/comment/118157535#Comment_118157535

The average age of the Irish dairy farmer is mid 50's still

They are the ones that will be voting

Many of them will still have milk quota purchase as a capital loss to offset any tax on the sale of spin out shares

Mooooo

Any qouta purchase write off would be finished by next year?

atlantic mist

the coop has a good asset in glanbia plc shares, good dividend, our grandfathers worked hard to create this model where in bad years we have an alternative source of income for farmers on the ground, why is it being destroyed?

do they see no further growth prospects for glabia plc? if so sell it all.....but thats hardly the case siobhan is staying on in plc:)

if glanbia plc want rid of the business then why not let a european dairy come in as our 40% sharholder if they have route to eu market which we dont seem to currently have half our product is sold outside the block, but they will come in as a 40% shareholder and we have 60% so we have control no matter what happens were now used to giving out a share of profits and have one of the highest ebita in europe so we'd be an excellent partner, lets keep the shares in glanbia clear the coop debt

how long before glanbia plc leaves ireland is now the question, enjoy those nice jobs in kilkenny

unlock value = pure greed

a big question will be how many farmers borrowed to buy coop shares i know of one who did and i really annoy him with my talk of holding all coop shares in plc and never selling, hes sweating buckets, dangerous gambling on the grey market but if it goes through hell be farming in an italian suit

jaymla627

Their going to try and ram through this before Xmas with a online sgm going of the letter this morning, how the hell is that going to work voting wise, covid has been a great excuse for the head boys to dodge us the past two years and they are still playing it to a tee

whelan2

Share price is €12.83 atm over a euro down on what they said in the letter

I suspect this proposal is going fail

jaymla627

https://www.boards.ie/discussion/comment/118182725#Comment_118182725

Listening in on the virtual meeting,it's a sheer waste of time, questions been asked like future pension liabilities which are simply been fobbed off as been taken account of, and no figures our numbers been put on it, I wouldn't trust anyone in the panel to remotely have the farmers best interests at heart, its simply impossible given the conflict of interests that the top lads very much walk to Siobhans tune

https://www.boards.ie/discussion/comment/118185750#Comment_118185750

I've been listening on the phone too

A lot of wooly speeches and wooly answers to questions

Question asked 

'What can't you do now that you'll be able to do after this'

Poor answer to that in my opinion, yet hundreds of millions in shares and borrowing being expended for no tangible benefits other than to the plc who get an immediate overpriced cash injection, reduce their biggest shareholder to 20% and jettison a low margin business

Handy...

Also 4% roughly of the shares,the vote will give the board permission to sell for whatever purpose they like in new investments...

What is their record like on buying new ventures in recent years? I would suggest not great

Jizique

Didn't they row back from selling shares to fund the deal?

When is the vote happening?

jaymla627

https://www.boards.ie/discussion/comment/118267931#Comment_118267931

The 17th, forms for registration came here Friday, they haven't really, their is a disclaimer on the info sheet that if all resolutions aren't passed, the deal is off in its entirity, if they where able to fund it without share sales, that wouldn't be the case

atlantic mist

the whole thing is very confusing and seems very rushed with very little detail esp for a 300million deal

why was the original purchase not based on a multiple of PAT??

its a 2billion business with no in house finance or IT, they want to use the plc's going forward?? sounds like mickey mouse stuff

they can sell whey to anyone just no one in US.....if we have no conncetion to the plc why would we agree to that

they will have no inhouse finance team but they want an investment fund of 148m to go investing if something pops up...seriously lads....we want to have the next warren buffet at the top table able to size these things up....!!!

no idea of marketing cost of change of name??? jesus wept!!

if plc is expected to grow at 8% a year, and we are going to grow at 3% at a push with enviro and processing constraints going forward why would we sell now??? whats the rush.....

one minute they are out in the press saying the coop will buy GI without shares if need be and in the form it has it if we dont pass the sale of shares none of it goes through....do they know what they are at??

im a no to selling the plc shares so i suppose im a no to it all even though i agree to independant directors, a lot of support for it around, prefer to see a strong coop with a good plc dividend, that was aim off coop originally these share spin outs have messed up the coop ethos in glanbia

elephant in the room is only half the members of coop active, need to address this before they sell all the shares in plc otherwise dry sharholders will get a few more spin outs and then nothing further ever to spin out

belview has been a disaster in terms of baby production, a cheese factory should have been built....i hope 148m is not given to same management team for future investment, the second project they have undertaken isnt going to plan either....poor track record....id like to see those two projects prove themselves first

jaymla627

https://www.boards.ie/discussion/comment/118292694#Comment_118292694

I think they are really under-estimating the discontent among suppliers, if I was to make a bet I'd say they won't get it through, it's all to vague and wishy washy the spiel coming out of Jim, chatting a a good friend thats in alot of glanbia suppliers yard daily, no one he's came across is voting yes, the online voting might back-fire too as the older generation of dry shareholders might not bother registering to vote

kevthegaff

Maybe their hoping with the ads that it will get dormant suppliers to vote

whelan2

Is the voting only at a certain time? I know the meeting starts at 2. I'm away at something else that day and don't want to be faffing around listening to crap.

Tileman

Cannot see any benefits to the proposal.

why would you sell shares in the profitable growth part of the business and take ownership of the low margin business.

one question what can the co op do if the deal goes through that they can’t do today.

I have yet to hear one thing of substance that they can do if they are a 100% co op

alps

Would farmers be in a better position to put a stop to this product destruction if they fully owned the coop?

atlantic mist

https://www.boards.ie/discussion/comment/118293523#Comment_118293523

no the plc own that .....dont ask me how

alps

https://www.boards.ie/discussion/comment/118293716#Comment_118293716

What sort of exclusivity deals will be attached to this sale?

alps

Absolute madness if the coop will have its hands tied regarding where or to whom it can sell its product..

JeffKenna

Dad got a call urging us to register and vote in favour of this. Glad I found this thread as I respect the opinions here far more. Will be voting against.

whelan2

Got a phone call here too and a few texts. Registered yesterday.

Registered also and have had calls and visits

I've reservations about the price,the investment fund and the why now

However I'm minded to vote yes because I want farmers interests to be in control of our Co-Op again and NOT the financial markets

Farmers ultimately will have a substantial say in the investment fund via the board without reference to the plc or banks

I also like the idea of funds independent of banks being available

Also it seems the formal 3% margin requirement which was always a shackle wanted by the markets is going ,in favour of a more flexible approach to profit,not Rigid as we have now

To date that's been a milstone, a roadblock stopping suppliers being able to question good profits but a not so good milk price relatively

My own view is having divorced itself from what markets see as a drag (the CoOp), plc shares will probably rise,somewhat cancelling out the loss of some Coop ownership in value terms

Thats my thinking at the moment, totally setting aside frustrations that while there don't add to the positive or the moving forward

jaymla627

https://www.boards.ie/discussion/comment/118294355#Comment_118294355

If the co-op suddenly finds itself saddled with financing the buyout from borrowings and then the aware palnt aswell, if it goes through, that's circa 300 odd million of fresh debt, that's going to be paid by the cow, another sidebar re fertiliser prices etc, would it not be prudent to keep any rainy day money to get suppliers over the spring, extend credit etc then financing this deal....

https://www.boards.ie/discussion/comment/118294626#Comment_118294626

Glanbia borrow at 0.1%, it's an AAA entity as will GII outright owned by the CoOp

Something will have to be done on fertiliser yes (like an extended credit scheme)

Forces against that are in the markets, not the Coop

jaymla627

https://www.boards.ie/discussion/comment/118294667#Comment_118294667

Cheap money is going to be a thing of the past very shortly if china implodes like is been flagged, if the co-op can lock in fixed rates well and good, but if its variable, the sh**t will hit the fan...

https://www.boards.ie/discussion/comment/118294696#Comment_118294696

AAA borrowers borrow at government rates basically and in similar ways,with lumps refinanced regularly

I'd have thought having an investment fund via a percentage of shares likely to grow in value before being accessed is a good tool to have when re negotiating terms for loans

Also,AAA status isn't handed out lightly

atlantic mist

https://www.boards.ie/discussion/comment/118293731#Comment_118293731

its udder madness

we cant sell whey protein in america (96%of ingredients is our whey they add in 4% minerals and charge a whopping premium) or we cant sell our own butter in america as the PLC owns the truley grass fed brand and we cant compete with a customer.....how our management team allowed this is beyond me..suppose to be a clean break but its like a divorse with a heap of conditions....there is a good reson we get paid such a poor milk price and its been dirty antics like this out of the PLC....hope the pension funds take note

jim doesnt seem to be able to stand up for us in these senarios....or doesnt have the vision to create the truley grass fed instead of giving the plc the huge margin and riding the suppliers, he is not the man who should be running both our coop and GI

its a bit of a dirty one siobhan and jim pulled on oranua......its not us the coop or GI selling the truley grass fed brand its the plc so nothing to do with us "they are a customer just like oranua", they think they are smarter than the rest....but they are peddling the bike backwards with annoncement the coop will buy GI without shares...now they will do share buyback.....chairman thinks time is right to sell.....not good for future prospect of plc if he thinks we should sell now....hope is time is up if this fails

GrasstoMilk

https://twitter.com/ainepoconnell/status/1468898097870913540?s=21

jaymla627

https://www.boards.ie/discussion/comment/118294862#Comment_118294862

White lies re not using shares for purchase on latest information meeting they'll either be sold next year our used as collateral for borrowings, he's lying through his teeth trying to get this over the line, just look at how they hoodwinked liquid milk suppliers who took up the scheme to exit, and didn't receive anything like what was talked about compensation wise, the share buy scheme is serious messing to, and now you realise they had this all mapped out years ago before they announced the split up

atlantic mist

ya what annoys me is i asked why they didnt buy the 100% on the first spin out instead of drip feeding it to us

jim and or siobhan both said they had no interest in doing that and they wanted to keep the ties as glanbia are a worldwide recognisable company, they are either riding the plc shareholders or the coop shareholders on this...debt can be secured cheaply and we were to have comfort knowing our cheque was gaurenteed by plc cheque book no matter how bad things got ....jim didnt want brands...now he does...

if i had known the same as top table i wouldnt have bothered building facilities and id have bought coop shares instead, id love to get a look at the coop register see where the huge share purchases have occured and then have a look at the plc shareholding....how can coop memebers be objective for the coop if they hold a large volume of shares.....all directors should be made reduce shareholding to avg on appointment, its easy to fix coop ethos

jim has a huge pot of plc shares also, serious conflict of interest there

got call from GI rep supposably there is a .6c milk increase if it goes through, they are unbelievable....of course i couldnt get that in writing....you know what they say a mans word is only as good as the paper its written on....employees of GI should NOT be taking sides and pushing this

jim wants to get it done as he and siobhan wouldnt be around for ever....jesus wept.....thats right no one could come up with a better deal than ye, cocky out

The reason they didn't buy the entire at the start,which they should have done is because of the very simple reason that they wanted to do it tied in with other things bit by bit

It was in my view always the intention to off load the Agri business but in a way that loosened the grip the Coop has on the plc-its a drag share price wise

It works both ways on that score

Behind the hype,they are mutual enemies in the sense of having different priorities

Having plc actors on the board of the Coop has been an enemy of the farmer

Regarding what's been said in the last few posts,you need to outline not just the mistakes of the past few decades but HOW voting no will change that rather than making it WORSE

The accountability improves immediately on a yes vote on the other hand with the jetisoning of market influences