Lakeland merger: Details outlined ahead of info events and SGM

Further details of Lakeland’s proposed merger with LacPatrick Dairies have come to light, along with the news that Lakeland Dairies is to hold nine information meetings for its shareholders over the course of next week.

This is ahead of a Special General Meeting (SGM) to decide on whether to approve the proposal, which is set to take place on Tuesday, October 23.

The SGM will see shareholders voting on three merger resolutions: the approval of the merger; the issuing of bonus shares; and  amending current Lakeland rules to maintain the existing representative structure until the merger goes through.

Meetings

Beginning next Monday, October 8, the information meetings will continue throughout the week, with a further meeting scheduled for the following Monday (October 15).

In booklets issued to Lakeland shareholders, the co-operative’s board outlined strategic benefits to the proposed move, highlighting operational efficiency, market access, Brexit assurance, product diversification, enhanced flexibility and sustainability through reduced volatility risks – among other points.

The combined size of the two co-ops to a globally-competitive scale was also highlighted.

Proportion breakdown

Following the merger, should it go ahead, the registered name of the new co-operative will be Lakeland Dairies Co-Operative Society Limited.

The representatives of both co-ops reached consensus that the proportions of shareholding to be held by the shareholders in the new society should be: Lakeland 73%; LacPatrick 27%.

Should the merger go ahead, following completion and the associated bonus share arrangement, shareholders will receive one share in the new society for every share they currently hold in Lakeland Dairies’ current form.

In line with the proportional breakdown, shares issued to Lakeland shareholders in the New Society will collectively represent 73% of the total shares in issue in the New Society, with LacPatrick shareholders holding the other 27%.

Bonus shares

In addition, the issuing of bonus shares is also proposed by Lakeland’s board.

Should the proposal be approved at the SGM, and before the merger is completed, shareholders will receive one bonus share in Lakeland for each ordinary share that they currently hold, doubling their shares in the co-operative.

A new set of rules for the new society will also be brought in, pending approval from members. These will be based on existing Lakeland rules with some modifications to allow alignment between the two broadly similar rule sets.

Transitional board

A ‘transitional board’ will be established for the first 12 months following the merger, with the existing representative structures of both co-ops remaining in place during this time.

This board will be made up of all current board members of Lakeland (12 elected and 3 co-opted Lakeland board members), and eight board members from the LacPatrick board.

At its first meeting, the Transitional Board will elect a chairman who, it has been agreed, will come from the Lakeland members of the Board. There will be two vice-chairs, one from each co-op.

Following a review of shareholder representation and governance, new society rules will provide for a total of 16 electoral areas.

These will be the existing 12 Lakeland areas – and 1 new Republic of Ireland Lakeland area – plus three Northern Irish electoral areas, comprising the existing LacPatrick Northern areas.