Kerry Co-op shareholders “can take no more” as they await the co-op’s imminent formal bid to buy Kerry Group’s milk processing division.
There is increasing unrest as shareholders express that “it’s terrible to be treated like this” in regards to the co-op board choosing to go ahead with the purchasing process without giving them an opportunity to vote on the move.
“The whole thing is really on knife-edge now, people can take no more,” co-op shareholder Dave Scannell told Agriland.
“We want Kerry Group to say ‘right, we have to allow these people to have a vote’.
We’re going to go for signatures for an EGM anyway. It’s written into the co-op rulebook that if 20% of A and B shareholders sign a petition, we can force an EGM to be called.
“All we want at the EGM is there to be a binding vote to give all shareholders a say on whether or not they want to go ahead with these proposals. If we got that, they [co-op board] could just forget about it because there isn’t a hope they’d get people to vote for this.”
‘Kerry Co-op will owe Kerry Group the €700 million’
The decision to not hold a vote was taken at a meeting of the co-op board last week – with the bid expected to be made over the coming days.
This is the latest move in the process of a joint venture, known as “Project Seafield”.
“This is the straw that has broken the camel’s back. We will move heaven and earth to stop all of this no matter what,” Scannell continued.
“Come hell or high water, this won’t be happening. What we saw with the protests at meat plants in recent years – that is nothing compared to the lengths we are willing to go to.
“Even if Kerry Group and Kerry Co-op came to any sort of an arrangement, we’ll have about two weeks then until they sign it.
“And after that is signed then, Kerry Co-op will owe Kerry Group the [estimated] €700 million – but we’ll have about a two-week window to get a court injunction to stop that from ever being signed.”
Scannell, who had previously supported the joint venture as it once had “massive potential”, said he supported it because “it was a given that people would be allowed to have a vote”.
“The entire founding principles of co-operatives is one man, one vote – there’s no proxy votes in a co-op, and the entire point of there being no proxy votes is so that the will of the people can’t be subverted,” he added.
‘Hitting at the most vulnerable of shareholders’
The first step of the co-op’s proposal would be the purchase of 60% of the new entity formed by the joint venture.
In three years’ time at the option of the co-op, or five years’ time at the option of Kerry Group, Kerry Co-op would then buy the remaining 40% for cash at the original bid value, plus interest, according to the proposal.
The document notes that both organisations would have to sign an agreement regulating the ownership and governance of the new entity for as long as Kerry Group retains its 40% share.
Dave Scannell, along with his father, expressed that what is being proposed is “hitting at the most vulnerable of shareholders”, as it has been proposed that 40% of shares “would be retained as collateral”.
“Now, people can cash in their shares twice a year and pay income tax on them. That suited the small shareholders down to the ground, or the pensioners – because they could cash in €10,000 worth of their shares every year and top up their pension,” they added.
“Now with this, that scheme is going to be taken off altogether. This is hitting here at the most vulnerable of shareholders.”