Glanbia package could be tasty for farmers

One More Thing:Farmer shareholders in food group Glanbia are set for a tasty windfall if they approve a €41 million package on offer from the Kilkenny-based group.

Under a proposal put together by the board of the Glanbia Co-op, which owns almost 55 per cent of the listed company, 14,000 farmers would receive guaranteed price increases for grain and milk over the next three years. They would also personally receive 1.6 million free shares and get a minimum 4 per cent dividend each year up to 2009.

The scheme would also see about six million shares owned by the co-op sold gradually into the market over the next three years. This would mark the first time that the co-op had sold any of its shares, although it would still retain 51 per cent of the group's stock, which is currently valued at €580 million.

Glanbia's share price is up about 28 per cent this year, making it one of the top three performers in the Irish stock market.

With the shares in demand, the co-op's proposal would aid liquidity, albeit in a modest way.

After years of painful restructurings following the merger of the Avonmore and Waterford food groups, Glanbia looks like it could be set for a period of good profit growth thanks to a new focus on consumer products and nutritionals. Its focus on high-volume, low-cost milk manufacturing operations in New Mexico and Nigeria look like good investments.

Having seen their counterparts in Kerry and IAWS net multimillions in share sales over the past decade or so, Glanbia co-op members seem to have decided that the time is ripe to cash in some of their chips in what could be the just the first of many future share sales.