Glanbia Co-op expects to raise €155m after share placement

Glanbia Co-op expects to raise about €155 million after it completed the placement of 8.7 million ordinary shares in Glanbia plc on Monday.

The share placement, at a price of €17.80 per share, follows the decision last week by Glanbia Co-op shareholders to approve the acquisition of 60 per cent of Dairy Ireland from Glanbia plc and the creation of a new joint venture to be known as Glanbia Ireland.

The Kilkenny-based food group is to sell off a controlling stake in its dairy business to Glanbia Co-op, its largest shareholder. The deal will see Glanbia Co-op pay €112 million to Glanbia plc for a 60 per cent shareholding in its Dairy Ireland division.

The move will see Glanbia’s Dairy Ireland consumer foods and agribusiness units hived off into Glanbia Ireland.

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The co-op also plans to “spin out” a further 5.9 million shares in Glanbia plc to members and add €40 million to its members’ support fund. This is equivalent to 2 per cent of Glanbia plc’s issued share capital. The process will be completed later this year.

Once the placement is complete, the co-op will hold approximately 33.5 per cent of the issued share capital of Glanbia plc. On completion of both the placement and the “spin-out”, the co-op’s holding will be 31.5 per cent of the issued share capital.

The proposed transaction and the creation of Glanbia Ireland were approved by Glanbia plc’s independent shareholders at an extraordinary general meeting on Monday at the Lyrath Estate Hotel, Co Kilkenny. The transaction is expected to close on July 2nd.

Transaction

Last month Glanbia said the Dairy Ireland transaction would dilute adjusted earnings per share by 5-7 per cent on a full-year basis.

Co-op chairman Henry Corbally said the creation of Glanbia Ireland was “an exciting development” for Glanbia farmers.

“It brings the strong portfolio of Glanbia’s Irish dairy and agribusiness assets into majority co-op ownership while building on the strong partnership with Glanbia plc.”

In three months to April 1st, the company said total group revenue increased 9.6 per cent on a reported basis, and was up 7.7 per cent on a constant currency basis compared with the same period last year.

Glanbia said the stronger performance was driven by pricing growth of 2.1 per cent linked to improved dairy markets, volume growth of 1.7 per cent and a contribution from acquisitions of 0.9 per cent.