Tirlán Co-operative Society is seeking the approval of its members to change its rules to facilitate the release of €239 million to its more than 11,000 members through a spin-out of 15 million Glanbia shares. The 100 per cent farmer-owned Tirlán is the business behind Irish brands such as Avonmore, Kilmeaden, Premier and Wexford in its portfolio, while its international brands include Gain Animal Nutrition, Truly Grass Fed, Millac and Solmiko. The co-op was created when Glanbia Ireland, the dairy company owned by the former Glanbia Co-operative Society, was rebranded to distinguish it from the publicly-listed food group Glanbia. Tirlán remains the largest shareholder in Glanbia with a 28.9 per cent shareholding.
The co-op said on Monday it will hold a special general meeting of its members to approve a proposed rule change that would allow the board of the co-op “greater flexibility” in managing its investment in Glanbia. Tirlán chairman John Murphy said the move was centred on the fact that the board of Tirlán cannot currently reduce the co-op’s shareholding in Glanbia below 17 per cent.
The Share Spin-Out
The group said the release of the shares would be worth approximately €7,013 in value in the form of Glanbia shares for every 1,000 shares that a farmer currently holds in Tirlán co-op, or €24,604 to an average active member. Tirlán is valued at more than €1.7 billion, with a significant proportion of its value concentrated in its shareholding in Glanbia. Tirlán proposes to transfer, via share spin-out, 15 million Glanbia shares to all members of the society in proportion to the shares they currently hold in the co-op. Based on Glanbia’s closing share price of €15.90 on August 28th, this would be worth approximately €239 million to members.
Timeline and Support
If the proposed rule change is approved, it is envisaged that the spin-out to its 11,046 members would occur in the second quarter of 2025. The proposal has the unanimous support of the board. Tirlán has spun out 48.6 million Glanbia shares with a current value of €772 million to its members since 2013.
Why the Change?
“As a board, we firmly believe that now is the right time to provide our co-op with greater flexibility to better manage our financial investments,” said Mr Murphy. “Our objective, over time, is to diversify and to target increased farmer returns over the long-term to meet the needs of our members. Our focus is on maximising farm returns through payments for milk and grain, as well as targeting the payment of a strong co-op dividend, allowing us to reward members now and into the future.”
Engaging with Members
Its chief executive Seán Molloy said the group would be engaging with its representative structure on the proposal in the coming weeks. “We would encourage as many as possible of our members to attend our series of information sessions,” he said. “Our farmer-facing team and co-op office staff are also available to provide information to members. We will write to all eligible members in the coming days with details on how to register and vote at the forthcoming meeting.”
A Move Towards Diversification
This move by Tirlán suggests a shift in strategy. By releasing a significant portion of its Glanbia shareholding, Tirlán aims to gain greater financial flexibility and diversify its investment portfolio. This could open new avenues for the co-op to invest in different areas, potentially leading to higher returns for its members in the long run. This move indicates a focus on strengthening the co-op's financial position and maximizing returns for its farmer-members. The proposed rule change will be put to a vote by Tirlán members, with the outcome potentially shaping the future of the co-operative and its impact on the Irish dairy sector.
