Shareholders query PWC findings at meeting of Newmarket Co-Op
THE price tag of Newmarket Co-Op at €33 million by PriceWaterhouseCooper s "represents fair value for the shares in Newmarket," read a statement from the Duhallow based co-op this week.
Some members of the strong farming community in Duhallow expressed dissatisfaction at the figure reached by the auditing firm, with one farmer, Michael Murphy of the belief that the Co-Op is worth at least €60 million. At the meeting held in Ballydesmond last Wednesday night, a shareholder who also has a very strong background in accountancy also queried the findings of PWC.
The statement received by The Corkman from Newmarket Co-Op on Tuesday night read: "Having received an expression of interest from Kerry earlier this year. Newmarket requested PriceWaterhouseCooper s to carry out a valuation of the business to ensure that the Co-Op had all information required in order to consider the matter thoroughly. PWC subsequently reported to the committee that the Kerry offer represents fair value for the shares in Newmarket."
The information meeting held in Ballydesmond was attended by at least 350 shareholders along with management of the Kerry Group and Newmarket Co-Op.
The statement also read: "The Kerry offer being put to shareholders amounts to €26.6 million, plus a further consideration that would be receivable on the sale of Newmarket windfarms. The offer represents a premium of 27 per cent over Newmarket's net assets in its audited accounts on 31 December, 2009. This premium would rise to 33 per cent on the sale of the Newmarket windfarms."
The statement made reference to the information meeting in Ballydesmond and said that the Co-Op has reported operating profits of between €300,000 and €1.2 million in the past three years.
"In this regard, the Kerry offer represents 29 times the Co-Op's average operating profits. The rules of the Co-op currently require that shares transfer at €1 per share. That is the nominal value of the shares. The Kerry offer of €421 per share or €26.6 million in total, on completion, is at the midpoint of the PWC valuation range," further read the statement to The Corkman.
A query was put to Newmarket Co-Op on Monday in which some members of the farming community expressed a worry that the price of milk would greatly suffer if the Kerry Group were successful in their bid for the co-op.
The reply from Newmarket Co-Op read: "Kerry also indicated in writing that it will purchase milk from milk suppliers in accordance with Kerry's terms and conditions for buying milk. This would include participation in the Kerry Co-op patronage scheme for milk suppliers from April 2011."
- MARIA HERLIHY
