The Board of Glanbia Co-operative Society Limited has announced a range of proposals which, if approved by Members, could result in approximately €238m of value being made available to all Members.

The proposals from the Board of the Society include the transfer, via a share spin out, of 10m Glanbia plc shares, valued at approximately €170m, to all existing Members of the Society.

The Society will also create a €68m Members’ Support Fundthrough the sale of 4m Glanbia plc shares.

An additional objective of the proposals announced is to strengthen the current relationship between Society shareholding and milk supply, Glanbia says.

This will be achieved by facilitating the application by milk suppliers to the Glanbia Group to become Members of the Society through the issuing of up to 3m new shares in the Society. Other suppliers who meet the qualifying criteria may also apply for membership through this initiative.

The Society will also initiate a Share Buy Back Plan to purchase up to 3m existing shares from current Members thereby facilitating a voluntary sale mechanism for Members who wish to participate in this plan.

These proposals by the Board of the Society are subject to Member approval and will be voted on by eligible Members at a Special General Meeting (SGM) of the Society which is scheduled to take place in mid May 2015.

The detailed proposals are as follows:

Spin Out 10 million Glanbia plc shares (3.38% of plc shares in issue) to all current Members based on their existing shareholding in the Society valued at approximately €170 million.

Create a Members’ Support Fund in cash for future patronage and special dividends through the sale of 4 million Glanbia plc shares (1.35% of plc shares in issue), valued at approximately €68 million.

The Board of the Society will retain the discretion in relation to the timing and nature of the disbursement of this support fund subject only to the provision that in any calendar year that distributions are made from the fund, 75% of any funds distributed will be by way of patronage bonus and 25% of any funds will be by way of special dividend to all Members.

Operate a Share Buy Back Plan which will allow Members to sell their Society shares back to the Society on a voluntary basis at €5 per share (up to a maximum of 3 million shares). Shares purchased from Members under this Share Buy Back Plan will be cancelled by the Society.

Issue new shares in the Society to new Members in 2015 based on a requirement to hold the higher of 2,000 Society shares or 1 Society share per 200 litres of milk supplied. The maximum number of shares to be issued will be 3 million to be purchased at €5 per share. Members will have an opportunity to spread the payment for the new shares over a three-year period.

Amend the rules of the Society to reduce the minimum shareholding by the Society in Glanbia plc from the current 38% to 33%. Any further reduction in shareholding in Glanbia plc below 33% would require member approval in the future.

If these proposals are approved by Members, the number of Glanbia plc shares held by the Society will reduce from 121.9 million (41.2% of Glanbia plc issued shares) to 107.9 million (36.5% of Glanbia plc issued shares). The Society Board will also retain the discretion to reduce the Society’s holding in Glanbia plc to 33%.

Under current agreements the composition of the Board of Glanbia plc will reduce from fourteen nominees from the Society to ten nominees in 2016 and eight in 2018. If these proposals are approved, it is anticipated that the Society’s representation on the Board of Glanbia plc will reduce by one further nominee by 2020, bringing the number of Society nominees on the board of Glanbia plc to seven.

The Society will hold a number of Shareholder Information Meetings in the coming weeks to discuss these proposals with Members.