Coveney to receive €2.9m after sale of Greencore’s US business

Irish food group to pay shareholders a special dividend of €509m

 Greencore  has sold its  US operation to Hearthside  for $1.1 billion (€863 million). Photograph: Dara Mac Dónaill

Greencore has sold its US operation to Hearthside for $1.1 billion (€863 million). Photograph: Dara Mac Dónaill

 

Greencore chief executive Patrick Coveney will receive almost €3 million via a special dividend after the food group completed its €863 million sale of its US business. The Irish group said on Monday that it has completed the sale of its entire US operation to rival Hearthside for €863 million.

Greencore will pay shareholders, who approved the deal this month, a 72 pence sterling special dividend, €509 million in total, from the sale’s proceeds.

Company documents show that Mr Coveney owns just over 3.61 million shares in Greencore, meaning that he will receive a £2.6 million (€2.94 million) dividend payment.

Greencore did not pay Mr Coveney a bonus for last year, as the company under performed.

Although Greencore’s shares are listed in London, Mr Coveney, a brother of Tánaiste and Minister for Foreign Affairs Simon Coveney, lives in the Republic. As a result he will pay tax on the dividend at the higher tax rate.

Chief financial officer Eoin Tonge owns 553,552 Greencore shares, implying a £398,557 dividend payment. Chairman Gary Kennedy owns 153,363 shares which will earn him £110,421.

Greencore produces some brands of its own, such as Sutherland Deli sandwiches, but mainly focuses on making chilled and frozen food that supermarkets sell under their own labels.

Following the sale of its US business, most of Greencore’s activity will now be based in Britain where it is listed on the London Stock Exchange.

Entire business

The group announced the sale of the US operation in October, when it said it would sell the entire business for $1.1 billion (€863 million) to Hearthside

The division Greencore has sold provides sandwiches, salads and sushi to customers including Starbucks and 7-Eleven in the US.

Problems in the US prompted Greencore to issue a profit warning in March sparking speculation over Mr Coveney’s future at the helm.

When it announced the US sale in October Mr Coveney said that while Greencore had no plans to exit the market, it decided to do so because it was offered a “fabulous deal” on the business.

“We had no strategy to exit the US market. We felt we were making very good progress in not only scaling up but delivering progressively better returns on our US business,” he said.

“But because of the value creation that was available through the combination of Hearthside and Greencore USA, we felt and feel the right thing to do for shareholders is to crystallise the value of what we’ve built in America, ” Mr Coveney added.