The fate of Kerry Co-op’s “cash-for shares scheme” hangs in the balance.

The proposal would see shareholders surrender their co-op shares in exchange for almost their entire “see-through” value, which currently stands at over €600/share. The scheme could deliver almost €100m to shareholders, but all of that money is liable to income tax, as opposed to capital gains tax.

At packed meetings in Limerick and Tralee this week, the balance of speakers from the floor strongly opposed the proposals. Next month’s AGM will reveal if a silent majority exists to adopt the proposal. Kerry co-op executive secretary Thomas Hunter McGowan confirmed to the Irish Farmers Journal that it is unclear as of yet what level of support is required. Discussions with ICOS will determine whether the vote to approve will require the support of two-thirds of shareholders voting or just a simple majority.

To fund this scheme, the co-op will sell plc shares commensurate with the co-op shares being surrendered. The co-op will only sell one million Kerry plc shares at one time, meaning the maximum allocation for this offer will be about 164,000 co-op shares. However, if successful, the board intends for this offer to be repeated twice a year. There are concerns among tax advisers that the scheme would inflate Revenue’s valuation of co-op shares, with serious implications for family transfers of shares. The higher value may also impact on means testing for social welfare schemes such as farm assist and possibly the Fair Deal scheme.