Kerry Co-op feud continues amid calls for 95% share spin-out
Calls have been made for a 95% spin-out of shares owned by Kerry Co-operative in Kerry Group by an alliance of co-op shareholders – which the co-op board has rejected.
The calls follow on from clashes reported last week between the board and a group of shareholders regarding the findings of the co-op’s recent consultation among members to set course for the future of the co-operative.
Last week, it was noted that the co-op is currently in talks with tax advisors, Kerry Group plc and solicitors to try and devise a scheme to provide for shareholders “which might very well satisfy a lot of the requirements of the people who are looking for a spin-out”.Also Read: Rumblings of dissent following Kerry Co-op consultation
An alliance of shareholders has since called for a spin-out of the lion’s share of the entity’s 13.7% stake in Kerry Group.
Kerry Co-op Shareholders Alliance is seeking to have 95% of the co-op’s €2.3 billion worth of Kerry Group shares spun out among holders to the value of €2.185 billion.
Speaking to AgriLand, a member of the alliance, David Scannell, said: “95% would leave [the co-op] with hundreds of millions of euros’ worth of assets to represent us going forward which would be sufficient.
We won’t take anything less than that; we won’t take 94%, we won’t take 90% – a 95% spin-out is leaving them with a reckless amount of money going forward as it is.
“And those shares you’d hope would continue to appreciate in value; in maybe 10 years’ time they could be worth three or four times how much again.
“People are really taking a massive stand about this at this stage and they’re getting very cross about it.”
Scannell contended that the remaining 5% of dividends would still be a substantial amount of value and would keep the board in place.
Regarding the co-op’s recent consultation document sent out among shareholders, Scannell pointed out that 29% of the 1,507 members who responded to the survey – some 435 members – specifically sought a full spin-out of the co-op.
This was done without such an option being mentioned by the board, the dairy farmer contended.
“We were never given the option to tick a box or anything for a spin-out in that document; it just so happened that 29% of people wrote down on the ballot papers saying they wanted a full spin-out.
If we were given a box to tick, I’d imagine it would have been far, far higher.
“People asked for a full spin-out; we’re asking for a 95% spin-out so we could leave the co-op board and all there and leave them in their jobs,” he explained.
Co-op board response
A representative of Kerry Co-op board responded to the shareholder alliance, rejecting calls for a 95% spin-out.
Speaking to AgriLand, the spokesperson said: “You can’t have a 95% spin-out. When they talk about spin-out is actually liquidation.
“You can’t have a partial liquidation; you either liquidate it or you don’t. A full spin-out is the full liquidation of the co-op, which means no co-op; the current co-op would cease to exist.”
The spokesperson noted that the shareholder alliance had previously outlined two objectives – complete liquidation of the co-op and, more immediately, to “overthrow the democratically-elected board of the co-op”.
“From Kerry Co-op members’ perspective, the feedback we’re getting is that you can’t overthrow a democratically-elected board and you can’t have a partial spin-out; and our members are in favour of the co-op continuing into the future.
We have some new schemes coming and they’re commenting on something they haven’t seen yet – they’re working on things around the edges.
“It is the intention of the board to put forward our proposals in the new year to shareholders – and that will be the real test for what people want.”