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Kerry Co-Op Share Redemption - Information not speculation or opinion

  • 19-08-2021 05:19PM
    #1
    OTNiner
    Registered Users, Registered Users 2 Posts: 84 ✭✭


    I tried to get a older thread moved from the Kerry forum but it has not happened.

    Purpose of this thread is to provide the useful information that was provided in the previous thread without getting into speculation or personal opinions on the board or other posters.

    If I understand it correctly the next planned / originally announced redemption event (Nov / Dec 2021) is the last of the 6 announced - anyone any information / idea if these will be continued? I had heard some rumours of an EGM in August but have not heard anything recently.

    For those interested last redemption was at PLC 115.84 so 683.50 per Co-Op share, Agriland reported @ 665,000 PLC shares redeemed leaving the PLC shareholding at @ 11.8%

    Ref: Kerry Co-op sells €77 million in group shares - Agriland.ie

    https://www.agriland.ie/farming-news/kerry-co-op-sells-e77-million-in-group-shares/

    Kerry Co-op has sold €77 million worth of its shares in Kerry Group in order to fund a share redemption scheme for shareholders.

    Also from the 2020 Co-Op Annual report: Ref https://kerryco-op.com/wp/wp-content/uploads/2021/06/013007_Kerry_Annual_Report_2020_Web.pdf

    "SHARE REDEMPTION SCHEME We have now completed four tranches under the Share Redemption Scheme. The price achieved in the June 2020 redemption was €637.20 per Co-Op share while the price achieved in October 2020 was €690.30. There has also been a movement in the grey market where the price averaged €545 for the year with the highest price achieved at €600 per share."

    My calculations make this:

    Based on an average PLC closing price for the calendar year 2020 of €110.4225, €545 represents a grey market ratio of 4.935586 or 83.654% of the Co-Op redemption ratio of 5.9.

    The peak grey market price of €600 represents a ration of 4.77707 or 80.6793% of the peak PLC price of €125.60

    In general, these would correlate to the rumoured price ratio of @ 5* PLC being achieved on the grey market.

    By my calculations any one in the higher Income tax band looking to cash-in any significant No. of shares would be far better off selling in the grey market thus making it a capital gains tax event - even at acquisition value of €1.25 and Grey market ratio of 87.5% or 5.1625 *PLC price would net +22% over standard redemption.

    As unsure of exact rules if anyone wants more information and / or a spreadsheet that will calculate the different net returns (based on entry of a few simple variables i.e. expected income in 2021, PLC share price, qty of Shares and acquisition value.) fell free to PM me.

    Finally I believe the closing date for share transfers applications that would meet the timelines for the next redemption event is 24th Sept 2021

    regards



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