AN overflow meeting of shareholders of Kerry Co-operative in Tralee has given the final go ahead for the co-op stake in Kerry Group plc to fall below 51 percent.
Co-op shareholders voted yesterday by 1,457 to 375 to approve the required rule changes. This meant that just over 80 per cent of those attending yesterday's meeting approved the rule changes.
Following yesterday's approval of the rule changes, Kerry Co-op can go ahead with the reduction of the coop share holding in the plc from 52 per cent to 39 per cent, a move that would see almost £130 million worth of plc shares move directly into the hands of 6,000 co-op shareholders. The co-op shareholders will receive, on average, just over £21,000 worth of plc shares.
Market sources believe there is likely to be little selling of Kerry equity by co-op shareholders. The prospect of a substantial capital gains tax liability is likely to dissuade most co-op shareholders from selling their newly acquired plc shares.
Most co-op shareholders already hold plc shares under their own name and few of these shares have found their way onto the market since Kerry Group was first floated in 1986.
The new minimum co-op share holding of 25 per cent means that Kerry could issue over £700 million worth of new shares before the co-op holding would fall to 20 per cent of the enlarged share capital.
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