Kerry Group ups bid

29 June 2001

Kerry Group ups bid

IRISH food giant Kerry Group has upped its offer for neighbouring Golden Vale, in a bid that is being recommended to the firms shareholders.

If approved – and shareholders have until early August to make up their minds – the merged business will become the countrys second biggest dairy operator with a milk pool of about 1.09bn litres. That is about 20% of the Irish quota, just behind the 1.36bn litres controlled by Glanbia.

At least 50% of Golden Vale shareholders would have to accept the offer for Kerry to gain control, while 80% would be needed to secure outright ownership.

The move has been welcomed by farmer organisations, which have long accepted that milk processing has to be rationalised for Ireland to be able to compete on the global stage. Over-capacity is a big problem in the country, given its highly seasonal pattern of milk production.

"The merging of the two entities is a positive and significant development in the dairy industry," said Pat ORourke, president of the Irish Creamery Milk Suppliers Association.

The revised offer values Golden Vale at k252m (£154m), compared with an initial offer of just k218m (£133m). It is made up of a complex combination of Kerry shares and cash, plus a special dividend. &#42

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