Kerry Co-op, the largest shareholder in Kerry Group, has drafted in a veteran of the industry – former Dairygold boss Jim Woulfe – to advise on a possible deal that would see it takeover the listed company’s legacy milk-processing business.
The co-op has been in on-off discussions with the company about a possible transaction that would see Kerry’s traditional dairy operation, which includes popular brands such as Dairygold, Charleville and Kerry Low-Low spread, spun out into a separate joint venture in which the co-op would take a 60 per cent stake.
But co-op shareholders are uneasy about how the board plans to finance its stake in the joint venture and want the conversion rate of their shares in the co-op to be locked in at a rate of one to 5.9 plc shares.
This would effectively ringfence about 94 per cent of the co-op’s €2 billion value, leaving it with €180 million to finance any potential deal with the company.
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Woulfe, who has been around the block – he has worked for 40 years in various senior management roles, including 12 years as Dairygold’s chief executive – was unveiled as special adviser to the co-op on Wednesday.
He is currently a board member of Enterprise Ireland, Bord Bia, Mercy University Hospital and Fota Wildlife Park.
Kerry Co-op chairman Denis Carroll said the co-op was at an important juncture in its history, “and I am delighted to appoint someone of Jim’s calibre to work with the board in an advisory capacity”.
“Jim’s experience and knowledge will support the board as we develop our plan for the long-term future of the society,” he said.
Mr Carroll said the Kerry Co-op board will this year undertake a strategic review of a number of priorities.
“This involves examining what is possible within the co-op’s shareholding structure for the benefit of all members in line with the society’s rule book and examining any rule changes that may be required,” he said.
Co-op shareholders want the board to hold a vote on how shares in Kerry Group plc are valued at the upcoming AGM, which will have implications for how a potential deal to purchase the plc’s legacy milk business can be financed.
