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Glanbia spinout 2021/2



  • Registered Users Posts: 11,082 ✭✭✭✭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

  • Registered Users Posts: 6,491 ✭✭✭jaymla627

    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

  • Registered Users Posts: 11,394 ✭✭✭✭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??

  • Registered Users Posts: 6,491 ✭✭✭jaymla627

    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

  • Posts: 0 [Deleted User]

    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

    Post edited by [Deleted User] on

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  • Registered Users Posts: 8,611 ✭✭✭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

  • Registered Users Posts: 3,861 ✭✭✭GrasstoMilk

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

  • Registered Users Posts: 8,611 ✭✭✭Mooooo

    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?

  • Registered Users Posts: 1,258 ✭✭✭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 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,

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  • Registered Users Posts: 780 ✭✭✭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..

  • Posts: 0 [Deleted User]

    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

  • Registered Users Posts: 369 ✭✭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?

  • Registered Users Posts: 6,895 ✭✭✭kevthegaff

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

  • Posts: 0 [Deleted User]

    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

  • Registered Users Posts: 29,200 ✭✭✭✭whelan2

    No positive replies yet, are we being raided?

  • Registered Users Posts: 1,144 ✭✭✭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

  • Registered Users Posts: 6,491 ✭✭✭jaymla627

    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

  • Posts: 0 [Deleted User]

    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

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  • Registered Users Posts: 8,611 ✭✭✭Mooooo

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

  • Registered Users Posts: 1,258 ✭✭✭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

  • Registered Users Posts: 6,491 ✭✭✭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

  • Registered Users Posts: 29,200 ✭✭✭✭whelan2

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

  • Posts: 0 [Deleted User]

    I suspect this proposal is going fail

  • Registered Users Posts: 6,491 ✭✭✭jaymla627

    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

  • Posts: 0 [Deleted User]

    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


    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

  • Registered Users Posts: 1,852 ✭✭✭Jizique

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

    When is the vote happening?

  • Registered Users Posts: 6,491 ✭✭✭jaymla627

    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

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  • Registered Users Posts: 1,258 ✭✭✭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 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 like to see those two projects prove themselves first