KERRY Group chief executive, Mr Denis Brosnan, has given his clearest indication yet that Kerry Co operative Society is close to reducing its majority stake in the publicly quoted group.
Kerry Co op has a 52.2 per cent stake in the fastgrowing food ingredient and consumer foods group. In an interview with the Irish Farmers Journal, Mr Brosnan said there would be a rule change "soon rather than later" to facilitate the reduction of the co op stake.
Farmers want to exchange their co op shares for shares in the publicly quoted company, according to Mr Brosnan, who said this would bring the co op stake below 52 per cent. Kerry Group shares rose 5p yesterday to 520p, on speculation of a move by the co op's 5,000 farmers.
At 520p, the group is worth £852 million. If the co op reduced its stake to about 30 per cent it would raise £170 million.
Last year, Mr Brosnan said that the co op's stake could come down to between 30 and 40 per cent. But he added then that "there is still a pride in Kerry at the success of the company and for the co op to remain the core shareholder in the plc. My advice will always be to keep the core block of shares in Kerry".
The co op's stake has been reducing as the group raised cash in the market to fund acquisitions. But it would take two extraordinary general meetings of Kerry Co op and 75 per cent votes in favour at each, for the co op holding to fall below 50 per cent. There are 17 farmers on, the group board.
