The so-called Shareholders Alliance group of members in Kerry Co-op are disputing the outcome of Wednesday’s special general meeting (SGM) of the co-op and are claiming that shareholders have rejected the share redemption scheme put forward by the board.

On Wednesday, shareholders in Kerry Co-op passed a resolution by 63% that will allow Kerry Co-op to sell down its shareholding in Kerry Group plc below 10%. The co-op currently owns 13.7% of the shares in Kerry Group, which have a value of €2.6bn.

Despite the defeat of this resolution, the board of Kerry Co-op believes it can proceed with the share redemption scheme

However, a second resolution was put to members seeking to ringfence 96.5% of Kerry Group plc shares held by the co-op for redemption though this or future schemes. This resolution was narrowly defeated by just 17 votes at the SGM.

Despite the defeat of this resolution, the board of Kerry Co-op believes it can proceed with the share redemption scheme regardless and has said the rule change to go below 10% in Kerry Group plc was all that was needed for the scheme to proceed.

However, Dave Scannell of the Shareholders Alliance group is contesting the boards version of events and believes the defeat of the second resolution at yesterday’s SGM means the share redemption scheme cannot go ahead.

Second vote

“The second vote at Wednesday’s SGM was the only vote which was of any significance. That was the vote that the alliance campaigned people endlessly to vote against,” said Scannell.

“The rule change the board sought for the 'cash for shares' scheme required 67% shareholder approval. Despite the scheme being rejected at the SGM, the Kerry Co-op board is going to make it available to shareholders anyway but I would urge shareholders to not avail of it and wait until a capital gains tax scheme is offered instead,” he added.

Scannell said the defeat of the second resolution was the first time in Kerry Co-op’s 47-year history that a motion put forward by the co-op’s board was rejected by shareholders.