Golden Vale board wins in Kerry deal


One of the yarns about the Kerry bid for Golden Vale is that the first Golden Vale director and well-known lawyer/ entrepreneur James Osborne heard about the bid was when he was rung on his yacht off the coast of South America. Mr Osborne is reputed to have said something on the lines of: "Don't call me back until Kerry have a bid with a two at the front."

Current Account isn't quite sure about the absolute veracity of that particular yarn. But even if Golden Vale didn't manage to extract a three-figure price beginning with two from Kerry, Mr Osborne isn't going to do at all badly out of the takeover.

His 180,000 shares will net him a tidy #278,000 (£219,000) from Kerry, and that holding includes 80,000 shares he bought only last April at just #0.78 each - just about half what Kerry is offering.

The biggest beneficiary among the Golden Vale board will be long-serving finance director Liam Irvine, whose 336,060 shares will net him more than #518,000.

Mr Irvine also has 210,000 share options at exercise prices between #0.99 and #1.34, and he will net a further #92,000 from these.

Chief executive Jim Murphy only has 50,000 shares, worth #77,131 at the Kerry offer price. But he will net a further #340,000 when he exercises his 700,000 share options and sells the shares to Kerry. Mr Murphy is already a wealthy man, having been part of the management group that bought The Cheese Company in Britain and then sold it on to Waterford Foods (now part of Glanbia) a few years later.

Outside the board, the biggest profits are, of course, being notched up by Dermot Desmond, who stands to make a profit of about #10 million on top of the #6 million he made from his first investment in Golden Vale a few years earlier.

Like James Osborne, but on a much larger scale, Dermot Desmond has bought Golden Vale shares with impeccable timing. His 12.6 per cent stake includes 1.6 million shares bought at #1.04 each less than four weeks before Kerry came in with its recommended #1.5426 offer.

Although Mr Desmond is undoubtedly happy with that particular deal, one can assume that the seller of those 1.6 million shares is not so happy.

Speculation now is on whether Mr Desmond will take his Golden Vale profit in Kerry shares plus a bit of cash or take it all in cash. If he did take Kerry's one-for-10 share offer plus the extra 13 cents in cash, it would give him about two million Kerry shares - or just over 1 per cent of the enlarged equity (assuming the one-for-10 share offer is taken up in full). The market takes the view that Mr Desmond is more likely to take his profit than take Kerry's cash. We will wait and see.

Other institutional investors, who own about 20 per cent of Golden Vale shares, are likely to take the share offer. Getting hold of Kerry shares is mighty hard at the best of times so the 3.2 million shares available under the share offer are likely to appeal to investors who regularly bemoan the lack of liquidity in Kerry shares.

Kerry would probably be more than happy to see institutions own more of its shares. A full take-up of the share offer would see the Kerry Co-op stake fall from 37.1 per cent to under 34 per cent.