Glanbia co-op shareholders have seen €10m wiped off the market value of their spin-out shares as they wait for their arrival.

Shares in Glanbia fell below €15.10 for a time on Tuesday before closing at €15.49 – the lowest price in eight months. Shares are down almost 25% since a peak reached in April when they touched off €20 per share, following the decision by the co-op to create Dairy Ireland.

This has seen over €1bn taken off the market cap of Glanbia from its peak valuation.

The process where the co-op purchased 60% of the Irish agribusiness and consumer foods companies saw the spin-out of 2% of the co-op’s shareholding to its farmer members.

The average A1 milk shareholder with 4,000 co-op shares was to get 630 plc shares valued at €10,800 at the time. The same shares are now worth €9,830, a loss of almost €1,000. (based on €17.13).

10% in 10 days

Glanbia has seen 10% wiped off the share price value in the last 10 days alone.

The share price is following a pattern of recent years, where it periodically falls to around the €15 mark.

The question is whether its current price reflects a realistic valuation at around 20 times earnings.

Farmers have not yet received their share certificates due to the normal time lag in administering the spinning out of shares.

They will be anxiously watching share price performance in the coming weeks, as many had planned to sell shares to pay down debt or fund on-farm investment.

Milk scheme feed link fears

The IFA has reiterated concerns about the feed purchase element of Glanbia’s five-year fixed milk price scheme.

Following a meeting between IFA’s dairy committee and Glanbia representatives, including chair Henry Corbally, which reportedly was very animated, IFA dairy chair Sean O’Leary said “our committee members, are genuinely disquieted by the fact that, to obtain priority access to the fixed price element of the scheme, farmers will have to commit to purchasing all their dairy feed from Glanbia for the full five-year duration of the scheme”.

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