IRISH Agriculture Wholesale Society (IAWS) chief executive Philip Lynch is putting cash on the table to help smooth the merger with fellow co-op, SWS, sources have confirmed. A cash alternative is to be dangled in front of SWS's co-operative shareholders in a move that could be worth up to â¬25m to troubled food giant Dairygold.
Originally, it was expected that the merger of the two companies would be "allpaper" transaction with the five co-ops that own SWS happy to accept shares in the IAWS co-op with a view to participating in a future stock market listing of the merged entity.
However, in recent weeks, Lynch has proposed a cash alternative to help push the on-off merger of the co-ops, which has been under negotiations for almost 12 months.
SWS, dubbed the nation's most diversified co-op, is owned by Dairygold, Lisavaird, Drinagh, Bandon and Barryroe Co-ops. The business, which includes backoffice outsourcing and accountancy service, estate agents, wind and waste businesses, foresty, IT as well as farm services, is valued at up to 60m.
It has been repoted that Bandon, Barryroe and Drinagh support a merger wtih IAWS, with Lisavaird keen to back independent expansion of SWS. Dairygold, it is understood, will row in behind any decision taken by the west Cork co-ops.
Management is believed to owns 25% of the non-farm components of the business.
A report in the Examiner suggested that original proposals for a management stake of 40% stake in the non-agri business was a major bone of contention before the merger talks could be initiated.
The Irish Farmers Journal last week also reported that IAWS Co-op would spin out 11m of the 13m shares it holds in IAWS plc to its co-op shareholders later this year.
The move would reduce the co-op holding from 10% to 2%. A source close to the coop said that talk of the spinout of the public company shares was "pure conjecture".
IAWS plc grew out of the IAWS Co-op under Lynch's guidance. The co-op has interests in bread and animal feed.
Meanwhile, Dairygold has appointed Peter O'Donoghue as chief financial officer.
O'Donoghue was previously with Statoil. Dairygold, which owns 55% of SWS has denied that it sought a cash alternative.