Glanbia Co-op to hold Special General Meeting on 17 December

Glanbia Co-operative Society Limited (“Glanbia Co-op”) has announced that it will hold a Special General Meeting (SGM) of its eligible Members on Friday 17 December 2021 to vote on its proposal to take full ownership of Glanbia Ireland (GI).

As announced on 10 November, Glanbia Co-op proposes to pay €307 million to acquire Glanbia plc’s 40% interest in Glanbia Ireland. Currently, Glanbia Ireland operates as a strategic joint venture, 60% owned by Glanbia Co-op and 40% owned by Glanbia plc.

Voting on this proposal and a series of related resolutions will take place at an SGM of Glanbia Co-op on Friday 17 December at 2pm. The meeting will take place online in a virtual format permitted under current regulations and approved by ICOS. 

John Murphy, Chairman of Glanbia Co-op, said: “In light of the current public health advice and the fact that we have over 7,000 shareholders eligible to vote, our Board has decided that the SGM should be held in an online format. We are working closely with a proven technology provider to host the meeting that has successfully completed formal meetings for other Irish Co-ops. Our Members can be assured that we will support them in participating in this important meeting.

“Since these proposals were announced on 10 November, we have consulted with our representative structure and received positive feedback. These proposals are driven by our ambition to pay the best possible price for milk and grain to our farmer Members.

“The Board believes that now is the right time to take this step to create a well-invested, independent and future-focused Co-op. We are asking our Members to register by close of business on 14 December and vote in favour of these proposals at our SGM on 17 December.”

Transaction Funding

Glanbia Co-op Chairman John Murphy added: “It is important to clarify to our Members that the Co-op is in the position of being able to fund this proposed transaction, if required, through a combination of existing cash resources and debt facilities. Therefore, the funding to complete this proposed transaction is not contingent on the sale of Glanbia plc shares owned by Glanbia Co-op.”

Investment Fund

"The Co-op is the largest shareholder in Glanbia plc and is very supportive of its growth ambitions. In relation to our proposed Investment Fund, it is important to confirm to our Members that there are no current proposals to deploy the Investment Fund. The Co-op Board has no current intention to sell Glanbia plc shares and will not do so until such time as it has identified suitable investment opportunities capable of exceeding appropriate investment criteria. Our shareholding will continue to earn dividends from Glanbia plc in the interim. At the appropriate time in the future after the closing of the proposed transaction, we will formalise our investment strategy and identify a pipeline of opportunities that fit our strategy. Any proposed future investment projects will be subject to rigorous scrutiny and commercial appraisal.”

Spin-out of Glanbia plc shares to Members

Glanbia Co-op proposes to transfer, via share spin-out, 12 million Glanbia plc shares to all existing Members of the Society. Based on Glanbia plc’s closing share price of €11.90 on Friday 26 November 2021, this would be worth approximately €143 million. Based on current timelines, the proposed spin-out to Members would occur in the summer of 2022 at the earliest.

John Murphy said: “We believe that it is appropriate at this time to release some of the value created by our investment to our 11,200 shareholders. Experience of previous spin-outs suggests that the vast majority of Co-op Members retain their plc shares, remaining long term supporters of Glanbia plc.”

SGM approvals

At the forthcoming SGM the Co-op Board will seek the approval of eligible A1, A2 and A4 members present, by a simple majority, for the proposal to acquire Glanbia plc’s 40% interest in Glanbia Ireland.

Glanbia Co-op will also hold votes on related proposals that will require not less than a two-thirds majority vote of eligible Co-op members present, including two-thirds of members classified as active milk suppliers. Those proposals are:

• The replacement of the current threshold for Glanbia Co-op’s shareholding in Glanbia plc of 28% of the issued share capital, with a rule whereby the Board of the Co-op will not take any action to reduce the Co-op shareholding in Glanbia plc to below 17% of the plc issued share capital, without Member consent. This authority will permit the Board to proceed with the spin-out and the deployment of the Investment Fund as and when the Board deems appropriate;
• Approval of changes to strengthen the governance of the Co-op including the ability to add independent directors to the Co-op Board and the Chair being elected every two years rather than annually at present.

A proposal to create a 2022 Member Distribution Reserve, which is linked to all of the above proposals, will require the approval of A1, A2 and A4 members present by a simple majority. This Reserve will govern the future distribution of the Society’s income sources (net of administration and finance costs).

A separate proposed new rule provides flexibility to the Board to pay interim share interest (dividends) to Members, should they deem it appropriate to do so.

All of these proposals have the unanimous support of the Board and Council of Glanbia Co-operative Society, who recommend them to Members for approval.

The proposed transaction regarding the acquisition of full ownership of Glanbia Ireland will also be subject to approval by Glanbia plc’s shareholders via an extraordinary general meeting (EGM). 

Commenting today, Jim Bergin, Chief Executive of Glanbia Co-op said:

“We would encourage as many as possible of our eligible Members to register by 14 December and vote at our SGM on 17 December. Our farmer facing team and Co-op Office staff are available to provide support to Members in registering to participate. Over the coming weeks I look forward to continuing to engage with our Members to answer their questions and hear their feedback on these proposals. We will write to all eligible Members in the coming days with formal notice of the meeting, further information on the proposals and details on how to register for the SGM.”

* Based on the Glanbia plc closing share price of €11.90 on Friday 26 November 2021.

First Published: 1 December 2021