LacPatrick ‘issues’ non-disclosure agreements to possible bidders
LacPatrick Dairies is expected to issue non-disclosure agreements (NDAs) to four possible suitors this week as plans to consolidate the cross-border processor continue.
It is understood that the confidentiality contracts are expected to be sent to front-runners Lakeland Dairies, Glanbia, Aurivo and Dale Farm.
It is believed that the interested bidders will return with subsequent offers in the coming weeks.
A LacPatrick spokesman would neither confirm nor deny the issuing of the NDAs to the companies saying: “As a commercially-sensitive process has commenced, it would be inappropriate to comment on any third-party.”
Letter to suppliers
Meanwhile, following further board meetings to formalise the process, it is understood that LacPatrick chairman Andrew McConkey has written to suppliers to bring them up to speed on events.
In the letter, McConkey stressed to suppliers that although Lakeland Dairies, Dale Farm and Aurivo have all publicly declared interest in negotiating with LacPatrick “no discussions” have yet taken place.
Suppliers were informed that a project team has been established tasked with gathering information to be discussed by the board.
The letter states that: “The ultimate decision on the future of LacPatrick lies with the LacPatrick shareholders. Nothing can be agreed without the shareholders agreeing to it.”
We cannot put an exact time-frame on how long this will take but we do not expect the process to be drawn-out.
“Our priority is identifying the best way forward for the co-op which is in the best interests of our suppliers, shareholders, staff and customers,” the letter states.
Last month the board of LacPatrick met to set out a strategic vision for the co-op.
The processor subsequently announced that this decision may or may not include: partnerships; joint ventures; mergers and other opportunities.
Despite ongoing speculation that the reason LacPatrick may be on the market is its challenged balance sheet and significant debt in light of investments over recent years, suppliers have been told that the decision by the board of LacPatrick comes following approaches from international and national companies in recent months.
Additionally farm organisation representatives north and south of the border have also held meetings with LacPatrick Co-op – headquartered in Co. Monaghan – in recent days including: the Irish Creamery Milk Suppliers’ Association (ICMSA); Irish Farmers’ Association (IFA); and Ulster Farmers’ Union (UFU).
Speaking following a meeting Pat McCormack, president of ICMSA, said that clarity regarding the future of LacPatrick is needed “as soon as possible” to order to provide certainty to suppliers and to ensure that they receive a competitive milk price going forward.
LacPatrick management provided ICMSA with details of the process ahead along with assurances regarding milk payments and, at this stage, it is essential that the current process is brought to a conclusion as soon as possible.
“The needs of milk-supplier shareholders must take centre stage in any negotiations and any final agreement when finalised,” concluded McCormack.