Farmers are in line for a cash windfall if Glanbia co-op succeeds in passing the proposals it announced this week.

The proposals will be put to members to vote on at some stage in May. The share spin-out needs a two-thirds majority, which is more than what will be needed to allow the co-op buy the 60% of the consumer foods and agribusiness divisions.

This proposal will see Glanbia co-op transfer 2% of its plc shares to its co-op members.

Liquid

This means that the farmer member who holds shares in the co-op will get some of these shares cancelled and replaced by plc shares (which are much more tradable and liquid).

Based on a share price of €17.13, the 2% share spin-out would see about €100m returned to farmer shareholders.

For active dairy farmer members, the average value of the spin-out would be almost €10,800

The average farmer with a co-op shareholding could expect to receive over €6,600 from the spin-out.

For active dairy farmer members, the average value of the spin-out would be almost €10,800.

Looking at it another way, for every 1,000 co-op shares held, the co-op will cancel 47. In return for every share cancelled, it will issue 3.27 shares in the plc.

So, for the 47 shares cancelled, the member will receive 154 shares (valued at €17.12) in the plc. At this price, the value of these shares would be €2,600.

The payout to the farmer may be more or less than detailed above depending on the price of Glanbia plc shares when the spin-out takes place in May.