A resolution to cap future investments made by the board of Kerry Co-op at €50 million in a five-year period has been approved by shareholders.
The single resolution was the basis for a special general meeting (SGM) held in Tralee today (Wednesday, April 5).
It means that large investments such as a joint venture with Kerry Group would require shareholder approval.
In April 2021, talks between Kerry Co-op and Kerry Group on a potential dairy business deal were suspended after over 18 months of discussions.
Kerry Co-op is the largest shareholder in Kerry Group with an 11.4% stake in the company worth around €2 billion.
Shareholders
In a statement issued this evening, the board of Kerry Co-op said that it “is pleased to announce that members have voted in favour of a proposed change to the society’s rulebook at today’s Special General Meeting, which followed its annual general meeting (AGM).
“The resolution which would require the board to seek member approval for any investment which would exceed €50 million over a five-year period passed with 93% of members voting in favour.
“The AGM was well attended with over 450 Kerry Co-op shareholders present,” the board said.
Last November, a group of shareholders submitted around 1,200 shareholder signatures calling for an SGM to take place.
The group wanted a conversion rate for their shares of one to 5.9 plc shares to be added to the co-op’s rulebook.
They are concerned that co-op funds will be substantially reduced to pay for a joint venture with Kerry Group, while shareholders with no interest in milk processing will see their value in the co-op reduced.
However, both the Irish Co-Operative Organisation Society (ICOS) and legal advice sought by Kerry Co-op warned against prescribing a fixed determination or valuation ratio terms to the future sale price of co-op shares.
The board of Kerry Co-op said the resolution approved today would “best address the future fair value concern by limiting the co-op’s spend over a five-year rolling timeframe”.
In April, the board appointed former Dairygold chief executive, Jim Woulfe as “an independent external advisor”.
Along with having a “strong look” at the structure of the co-op, Woulfe will help the board to develop its future strategy.
“I expect that we will be in a position towards mid to late autumn to outline our future strategy plans to our advisory committees and membership and to proceed from there to putting forward our proposals in due course for shareholder consideration.
“Ultimately, we wish to ensure that future strategy will fairly benefit all our shareholding members,” Denis Carroll, chair of the Kerry Co-op board, said.