A challenge to curb the power of Kerry Co-op’s board is under way.
Members of the co-op’s advisory committees and former board members are gathering signatures from shareholders demanding a special general meeting (SGM).
The aim is to create a new rule that would limit what the board can or cannot do without a shareholder vote.
Last Friday, Kerry Group pulled the plug on the proposed joint venture that would have seen Kerry Co-op purchase 60% of Kerry’s Irish dairy business.
As previously reported, former chair James Doyle, the test case in the arbitration process, had stated his intention to restart arbitration
Reaction among farmers ranged from a lot of relief, given the leaks and vision that was circulating for the new venture, to disappointment.
With that deal gone, the “leading milk price” issue again comes to the fore.
As previously reported, former chair James Doyle, the test case in the arbitration process, had stated his intention to restart arbitration.
There was speculation that Kerry Group would write to suppliers giving notice of termination of the existing milk contract and highlighting their side of the arbitration story.
There is renewed activity among farmers across the catchment area to demand a SGM to get a new rule included.
One of the farmers associated with that movement, Tom Galvin from near Listowel, said: “I’m only one individual, there is a lot of disquiet and anger out there that people’s equity can be accessed without their consent.”
Galvin believes it will be no problem to reach the required threshold of signatures to demand a SGM.
Milk suppliers are being asked to sign a petition to hold a SGM under Rule 24 of the Kerry Co-op rulebook.
To trigger an SGM, 20% of the 6,500 A and B shareholders must sign
The motion, if passed, would mean that the board of Kerry Co-op would have to obtain shareholder approval before making any changes to the share redemption scheme or spending the assets of the co-op.
To trigger an SGM, 20% of the 6,500 A and B shareholders must sign.
General meetings can be held virtually, but nothing of this scale has been road-tested yet under COVID-19 restrictions.
The Shareholders Alliance is understood not to be involved in this process.
Concern among farmers, milk suppliers and shareholders about the undisclosed details of the long-running deal between Kerry Co-op and Kerry Group made the collapse of the proposal inevitable.
Perhaps both parties can salvage something before the year is out, or maybe the business will be sold elsewhere.
We now know the bid was rejected by Kerry Group, as it didn’t meet expectations.
Kerry Group plc confirms that discussions with Kerry
Co-Operative Creameries Limited in relation to a potential transaction have been suspended
Kerry Group said: “As announced in February 2021, Kerry Group plc is conducting a strategic review of its dairy-related businesses in Ireland and the UK.
“As part of the strategic review, Kerry Group plc confirms that discussions with Kerry Co-Operative Creameries Limited in relation to a potential transaction have been suspended.
“While the strategic review continues, there is no certainty that this will lead to a transaction and a further update on the strategic review process will be communicated later this year.”
The board of Kerry Co-op said it noted the decision of Kerry Group plc to suspend discussions relating to a potential transaction concerning the Group’s dairy business.
“With the prime focus of protecting the interests of, and delivering for all its stakeholders, the Co-op, over the past 18 months, engaged in a thoroughly professional approach to give this potential opportunity every possibility of success. We believe a fair valuation was put on the proposed transaction.
“The board of Kerry Co-op will remain open to evaluating opportunities.”