Kerry Co Op Shares

cap.in.hand.

https://www.boards.ie/discussion/comment/122919792#Comment_122919792

When it's approved you'll have to accept the majority accept 15% of their coop shareholding value is valueless there and then.

awaywithyou

https://www.boards.ie/discussion/comment/122919762#Comment_122919762

yeah inflation is our friend is right… they are saying 25million will be reinvested in the facilities yearly… with inflation that will be 40million a year in 5-10years time..

kerry_man15

https://www.boards.ie/discussion/comment/122919807#Comment_122919807

That's quite a price to pay just to have your shares converted. Extortionate really. I'd imagine many would have bailed well before know if they knew they'd have a take a 15% haircut just to get out.

Jack98

https://www.boards.ie/discussion/comment/122919635#Comment_122919635

You have one co op share.

Converted to 6.25 plc shares in deal, you receive 5.25 plc shares and the other 1plc share goes towards the €251m needed to buy KDI and you then in turn get 1 new co op share in the new venture.

That new co op share will most likely have a nominal value of €1 but may go up or down overtime as the new venture progresses, as was the case when Kerry co op started way back when. The plc share you give up in this deal is being invested into the new venture not just being robbed from you as you say.

Whether you like it or not this is going to pass I am now 99.99% certain on that and there is winners and losers in every deal but this is a win for the vast majority so therefore this deal can’t fail at vote.

straight

How can the co op board continue to exist with no shares? I though we would just have KDI and Kerry group at the end of this.

kerrysoul

Eventhough you are losing 15% of your coop shares if the deal is approved, it does offer a convenient and tax efficienct way to liquidate or transfer your PLC shares down the line. In any deal there are pros and cons, and nobody will be completely happy, but this deal offers something for all involved.

cap.in.hand.

https://www.boards.ie/discussion/comment/122919892#Comment_122919892

They must be issuing new coop shares under a new coop name

straight

https://www.boards.ie/discussion/comment/122919921#Comment_122919921

Who's going to be paying for all those plonkers in the board then?

straight

What does this deal offer a young milk supplier with no quota? I'd say it just offers a big bill for 5 or 6 years and a whole load of uncertainty in the new entity.

cap.in.hand.

https://www.boards.ie/discussion/comment/122919944#Comment_122919944

The profits of KDI will be held by coop during the JV anyway I'd presume.

jaymla627

https://www.boards.ie/discussion/comment/122919953#Comment_122919953

Apparently you'll be part of the most profitable co-op ever created which will be the highest paying in the country if not the world

straight

https://www.boards.ie/discussion/comment/122920056#Comment_122920056

Ya, they are going to pay the best price in the world ever. We are taking back control of setting our own milk price. All sounds just lovely.

Someone Suggested at meeting that this mighty new KDI could top up the arbitration settlement for the milk suppliers that are being short changed.

The Answer was that you couldn't ask a fledgling company to do that....

Next line was about taking back control of setting our own milk price and being a leading payer.

I can see what they are trying to do but I don't buy the BS that the milk suppliers are going to gain anything out of this.

The processing plants do alot of work for the PLC like drying off vinegar at this time of the year. Tangney sees no reason why this would change in the future. I'd expect it to be tendered out to the cheapest bidder.

I'd prefer if they told the truth but I guess they are like politicians. They know what to do, they just don't know how to get elected if they do it.

awaywithyou

https://www.boards.ie/discussion/comment/122920083#Comment_122920083

at the meeting i was at.. a farmer who used to be always giving out at meetings until he was put on the board gave a bit of a speech that everyone should vote yes.. that buying this business is the same as buying the land next door to you.. u have to buy it.. he got a nice round of applause… my jaw nearly hit the floor.. i said to myself if this lunatic is getting applause we the milk suppliers are rightly f##ked..

the farmer definitely wont be winning any milk quality awards anytime soon.. he prob wont even be milking in 5 years time as if he hasnt retired.. the dept will prob close him down.. this deal will pass at a canter.. and the likes of Tangney who has plenty of property in Croom.. and others who are in their 60's will take their PLC shares and basically will say to hell with the milk suppliers that are left to deal with whats coming down the tracks..

straight

https://www.boards.ie/discussion/comment/122920277#Comment_122920277

We got that tale about the farm next door too. Dumbed down for the audience like. It was the closing BS and everyone rushed off home to milk the cows.

Another Line I had to laugh at was this....

"If another processor buys this they are only going to be in it for the money. We are in it for the farmer." I'd swear people fall for this BS.

We have To Dave the 1500 jobs for the farmers sake. WTF like.

Very vague around the milk suppliers "convertible loan". What is the interest rate on that? They said they had to pay a dividend to the PLC because they loaned money to the JV and everyone that lends money has to get a return....

awaywithyou

https://www.boards.ie/discussion/comment/122920538#Comment_122920538

convertible loan stock… you'll get shares if thats what you want for your 1c/l you'll be paying to buy the thing or you'll get your monney back if you want if you quit the milking game

ftm2023

https://www.boards.ie/discussion/comment/122919770#Comment_122919770

Fully agree with your feeling of inevitability of it passing the vote. Lads will have no choice but to vote for it, and for plenty of genuine reasons. The average A shareholder is looking at around €200,000 between the 5.4c top-up and the share spin-out. That’s life-changing money—no one “around the Feale” as you once said on here, can turn their nose up at that.

Here in the farming forum, on a different thread back on July 1st, 2016, you and I talked about a farmer who couldn’t pay a student in full for his green cert work experience. The farmer was absolutely top-class—nobody could say a word against him when it came to his farming.

But the student ended up fighting with him over just a few euro—it was only small money, barely anything really. And in the end, the student realised the farmer simply didn’t have the money to pay him. It wasn’t out of badness; the farmer just didn’t have it. That’s the harsh reality of farming sometimes, even for lads who are at the very top of their game.

You’d know that farmer better than I would, and you know yourself just how good he is. But if someone as sharp and capable as him couldn’t make ends meet, what chance does a struggling farmer have? Now imagine telling the average guy to leave €200,000 behind him on December 16th. It’s not even a discussion—it’s just not going to happen.

straight

https://www.boards.ie/discussion/comment/122920598#Comment_122920598

So you will get your money back when you quit and no interest. That's what I thought. Or a magic share. I could find better places for my 30 - 40k.

Bass Reeves

https://www.boards.ie/discussion/comment/122919811#Comment_122919811

And with inflation the 75ish illion in EBITA will be 120 million inflation is your friend when you buy or invest.

Bellview

I went to the meeting in Charleville last night and my takeaway from the meeting

1. The group that are hi jacking the meeting on arbitration results are not doing themselves any favours as it appears they are joining a number of meetings having the same discussion.. and they are not rattling the top table one bit.. the top table are ready for these

2. There are huge gaps on what was presented the ebitda is incorrect on the slide from memory ...if you take the debt 96m and divide by the 71m.. you don't get 1.24.. saying that ebitda below 2 is good.. there is a gap in the numbers that is not been shown

3. If I was a milk supplier I would be more interested in who are the management, who leads the sales into the foreign customers .. are the kdi products sold as part of ie ingredients portfolio if yes then when split happens then will a new sales team be required etc

4. Working capital requirements and cash flow facility in place especially during peak milk period when there is more cash going out than in from sales

5. How will staff pension liabilities be managed. How many on defined benefit schemes etc. Are there any liabilities for staff that worked in agri in past and are now retired

6. The suppliers fund for phase 2 has a lot of outs.. and I see collecting this being a struggle

7. My guess ar why 5.3 was picked as conversion.. its literally half way between 4.8 and 5.9.. as allows skin in game and lower borrowing required in phase 1... but that is my guess

My advise to a few shareholders that asked me about this is if you are a B vote yes and collect the shares... but in your mind write off the 15% as you or not even your great grand children will never see this.. regardless of what was said at meeting. They will need tax advise to devalue this for all wills etc... If I was a milk supplier I would put more attention into the future than the 5.4c as this is distracting the debate on what will the co op will be in future

Bellview

Correct. The only piece shareholders will need to be careful is for inheritance or gifting the new co op shares. These would need to get valued a lot lower than 15% of the plc share since they will be basically impossible to sell even though they in theory own part of a 500m asset... they should be treated as community investments

cap.in.hand.

Good honest rundown there bellview

kerry cow

The milk producer group in hind sight should have appeared in the front row , with their team of experts and challenged the co op board with facts in a proper orderly way , with qualified people who’s could convey their view in a more professional fashion , asking the appropriate questions on mostly behalf of the audience ,

This did not happen

instead I believe some guys got up who should never be near a microphone , and fumbled and made a joke of themselves with foolish questions ,

Where are all the educated milk suppliers farmers sons and daughters ,

These people are well able to converse ,

I admittedly would balls it up , but we have well able young farmers who should speak up ,

Muted they are ,

And that really needs to change .
it’s the auld lads that mouth off

Bass Reeves

https://www.boards.ie/discussion/comment/122922251#Comment_122922251

Would it be these able capable young farmers have done the numbers and think it's a good deal.

kerry cow

possibly yes , but there are still legitimate Questions to be put and answered on the suppliers side ,

Proper debate is healthy ,and the questions get qualified better by articulated people .

straight

https://www.boards.ie/discussion/comment/122922303#Comment_122922303

No

Bellview

The only advise I would give now is that milk suppliers look to what the future reality. The presentation was well delivered by the top table and flows well.. but milk suppliers need to get under detail like the customers are they part of ingredients sales book and how will the relationship be maintained in future especially outside Ireland in China etc.. all B who I know I have advised them to vote yes and run and treat the shares in co op ad community investment as I expect these will get lost over time and the 170m put in by zb and C they will never see.. b

ftm2023

Regarding tomorrow’s edition of the IFJ, all I can say is I’m disappointed but not surprised. They’ve hit a new low by interviewing a former co-op employee best known for an infamous Dragons’ Den appearance. As for Jack Kennedy’s laughable claim that Kerry has a “divided shareholding,” it’s beyond pathetic. I was at the same meeting as Jack—two people spoke against the JV, both former directors, and they were literally laughed out of the room. This isn’t journalism; in my honest opinion, it’s pure gutter press.

Jack98

https://www.boards.ie/discussion/comment/122923551#Comment_122923551

You should write a letter to them so…

awaywithyou

Lorcan Allen painted a very good picture of the Kerry deal in his piece in the Indo... IFJ Lorcan looks at issues that will affect milk price...

https://www.farmersjournal.ie/agribusiness/news/how-will-kerry-dairy-ireland-pay-the-milk-price-suppliers-expect-847395

raindodger

https://www.boards.ie/discussion/comment/122922686#Comment_122922686

agree with you about looking at the future,thought to much emphasis from the floor on the leaading milk price,old battles being fought again we all believe that we didnt get it but that ship has sailed .Going to be winners and losers but most at risk are suppliers starting off .