An independent report on the proposed takeover of Wexford Creameries (WCL) by Glanbia Ingredients Ireland Limited (GIIL) has come down strongly against the deal.

Prepared by consultants Martin & Rea Tipperary at the request of a group of Wexford shareholders, it recommends rejection of the proposal and suggests that there are at least two other potentially interested parties.

Richard Rea’s summary states: “Based on our analysis of the overall deal, together with the fact that we have established that there are other interested parties, we cannot recommend to you that Wexford shareholders approve of this proposal. There is no urgency at this point, in our opinion, to dispose of WMP interest in Wexford Creameries at all”.

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The report argues that minor adjustment to book value would suggest a value of €25m for the business, approximately €10m more than what they argue is “the real value of the current offer - €14.718m”.

They point out that the price paid by Kerry Group for the Newmarket co-op business – 6.37 cent per litre – would value Wexford at €32m, or €17m more than the GIIL offer.

In relation to processing capacity, the report states that: “WCL already has spare capacity of approximately 100 million litres. GIIL are only making 50 million litres approximately available for your expansion and the other 50 million litres goes to GIIL”.

In a related “legal observation” on the proposal, solicitor Oliver Ryan Purcell has also recommended a “no” vote. Amongst a number of points, he maintains that “clauses 9.1 and 9.2 effectively confiscate from the milk supplier, his rights to his personal milk capacity volume”.