KERRY Group has, as expected, granted Kerry Co-op an option to buy its agri business division between the years 2001 and 2010.
The option is part of the proposal to reduce the co-op's stake in the public limited company (plc) from 52 per cent to 39 per cent and is subject to approval by the shareholders in both the plc and the co-op. The option can also be exercised if the co-op shareholding in the plc falls to 20 per cent or less or if Kerry Group sells a material part of the agribusiness division. The price paid will be determined by the open market value of Kerry agri business at the time of the purchase, but will not exceed 25 per cent of the group's net assets or its market capitalisation.
The agri business division accounted for 16 per cent of the company's overall turnover in 1985, but currently accounts for less than 5 per cent of sales and 3 per cent of operating profit. It is composed of the milk supply and assembly business, creameries, stores, depots, a cattle breeding station, an animal feed and pig breeding and fattening units. It had sales of almost £58 million last year, producing profits of £2.2 million.
