asked the Minister for Finance if, in view of the confusion regarding the reported bid by the US firm, ADM, for the public shareholding in Greencore, he will clarify the position about the reported offer; if he has been in direct contact with the company; and if he will make a statement on the matter.
Private Notice Questions. - Sale of Greencore Shareholding.
asked the Minister for Finance if, in view of the fact that the deadline for acceptance of bids for the sale of the Government's stake in Greencore has elapsed, he will give details of when the Government will decide on whether and the way in which these shares will be disposed of; if the Government has satisfied itself that the price submitted is reasonable; the protections, if any, which will be put in place to ensure that overall control of the firm will not rest overseas in the future; if his attention has been drawn to the reported comments of the chairman of ADM rejecting any interest by that company in Greencore shares and to the apparent contradiction between those statements and his account of the purchase proposals; and if he will make a statement on the matter.
asked the Minister for Finance if, in view of the confusion and uncertainty regarding the possible sale of the State's shareholding in Greencore, and the damage to the company which this situation could cause, he will clarify the situation as a matter of urgency; and if he will make a statement on the matter.
I propose to take Private Notice Questions Nos. 1, 2 and 3 together.
I agree that there has been much confusion created in various circles concerning the proposals received last Wednesday, 24 March in relation to the State's shareholding in Greencore plc. I indicated last Wednesday, following expiry of the three week period allowed for the submission of proposals, that I had received two written offers to acquire the State's shares in Greencore; namely, ADM and Irish Life. In relation to these proposals, I stated, and I am quoting my statement of that evening word for word:
ADM reaffirmed its interest in purchasing a stake in the Company and stated that at a minimum, its participation must exceed 25 per cent on a fully diluted basis. Irish Life offered to purchase two million shares, conditional on the Government selling at least 20 million shares to purchasers including Irish Life.
This statement would appear to have been misinterpreted in various quarters and speculation on the content of the ADM proposal even extended to an offer price being mentioned in some circles.
On radio yesterday Mr. Allen Andreas, the ADM Vice-President and Chief Executive in Europe said, and again I quote word for word:
It would appear that the newspapers reported as if there is a difference (between us) I personally do not feel that there is any difference. I think that everything the Minister has said is consistent with my understanding of what the facts are with respect to this transaction.
In reply to Deputy Yates, the apparent contradiction between myself and ADM is entirely apparent and not real and ADM have not rejected but rather reaffirmed their interest.
Deputy Yates will be aware that under the Articles of Association of Greencore plc no one shareholder may hold more than a 15 per cent stake. Any alteration of this limitation requires the prior consent of the Minister for Agriculture, Food and Forestry as holder of the special share and the passing of a special resolution by shareholders at an extraordinary general meeting of the company. The Deputy is reported to have suggested that the limitation on shareholding should be increased to 25 per cent.
Under the City Code on Takeovers and Mergers it is mandatory for any person who acquires 30 per cent or more of a listed company to make a bid for the company on the same terms. For this reason an increase in the limitation on shareholding up to 29.9 per cent is an option which I and the Government will be considering.
The protection afforded by the golden share in this, and in all other respects, will remain fully in place irrespective of whatever decision is taken in relation to the State's shareholding.
The Government's consideration of the proposals will take account of the recommendations of the Culliton report on the food industry and in particular the recommendation that the Irish food industry's performance could be significantly improved by a greater and selective involvement in the industry by multinational food companies with access to market and best industry practices. The report also recommended joint ventures and partnership arrangements with Irish food firms.
In reply to Deputy Rabbitte, as I have already explained to the House, I met Mr. Andreas on one occasion on 17 February this year, and I have not been in contact since then.
In reply to Deputy O'Malley, I do not believe that the confusion evident in certain circles will in any way damage Greencore and I can assure the House that the Government will complete their examination of options and reach a decision as soon as possible.
Is it not true that the statement made by Mr. Andreas is an attempt at post hoc justification on the Minister's part and that the attempted sale of the State's shares has been well and truly botched? Will the Minister agree that serious damage has been caused to the interests of the State by mishandling this affair, that this is likely to have been caused by the divisions between the two parties in Government which are now being exploited by ADM and that Greencore will have no option but to do business with ADM on their terms? If the Minister cannot even efficiently sell off the State's property, is it not time that he looked at the only honourable route now open to him?
Greencore will not deal with the shareholding; the Government will deal with it. Whatever decision the Government takes will be implemented by Greencore and the Government will make that decision as soon as possible. In regard to what was said yesterday, Mr. Andreas and I are in agreement. The Deputy is correct, however, when he says that some people, including himself, are trying to botch the deal but the Government will not allow this to happen.
Which half of the Government?
If the Minister now acknowledges that there was a misinterpretation why did he not take steps on Wednesday, Thursday or before the weekend to rectify and correct this given that the newspapers gave very detailed figures in regard to the value of the bid and the number of shares to be bought? Will he now accept that the reason he did not was that he wanted to create a bogus deadline of 5.30 p.m. on Tuesday last to exclude others from re-entering——
That is silly talk.
——because if there was no firm bid there was no deadline? It suited him to exclude at least one Irish consortium because he and the management of Greencore wanted ADM only to buy the shareholding. Did the Minister give his consent to the issue of a letter by management to the employees of Greencore that any Irish bid would, in effect, be hostile, therefore making such a bid impossible? Did he know in advance about this and approve it?
I will deal with the last question first. I did not know about the issue of the letter. The first I knew was when I heard about it through the media on the morning it was sent out. There is no reason Greencore plc should consult me about any letter it would send to its staff, although I stated publicly afterwards I did not feel that letter was helpful. In radio interviews on both Thursday and Friday I clarified that we were not talking about a bid but an offer. ADM had made it very clear that it saw a major difference between an offer and a bid. When reaffirming its interest, ADM stated quite clearly it never got involved in auctions or bids. Last week I made it clear in the Chamber that we were talking about expressions of interests.
In response to the question on other Irish institutions, I am not too sure to which institution the Deputy referred but the position is that when this story broke two Irish companies asked for time, one company needed until Friday and the other until the following Wednesday to make a decision. The first company had a board meeting on Thursday last and communicated to the Government and the Department of Finance in writing and verbally that it had considered the matter but had no further interest. It made it absolutely clear it did not want to be involved in a hostile bid or take-over. The other Irish consortium was less clear. It stated it required a week but at the end of the period said it needed more time as it had not organised the money but wished to try to put a bid together. When it was reminded, as everybody was, that the deadline was 5 p.m. on Friday last, it told us we would hear from it, but at 5.55 p.m. rang and said it was still interested. The following morning we received a letter from a financial institution, which did not purport who it was representing but we subsequently found out it was the Irish consortium. It was to give further details but they still have not been given. However, if it puts forward a proposal, I will bring it to Government with any other suggestions. The two Irish consortia were given every opportunity to make a decision.
Let me make it abundantly clear there are no difficulties good, bad or indifferent between Mr. Andreas and me. My statement of last week was factually correct. There never was a bid. I did not ask for a bid. As soon as the deliberations are concluded I will bring the full matter to Government for final consideration.
Is the Minister aware that in the context in which we are speaking there is no difference between a bid and an offer for shares and that he is simply confusing the already confused matter by trying to make such a distinction? The newspapers reported in some detail last week a particular bid being made for shares. The Minister said he gave two interviews, why did he not avail of the opportunity to contradict what was in the newspaper reports which went in to such details that they even included the price? Why did he refer in his reply to the fact that the Government would be prepared to consider an offer for up to 29.9 per cent of the shareholding, which is an even larger share of this company and would give rise to more concern and on whose part does he see a shareholding of 29.9 per cent? Finally, on what authority, expressed or implied, did the Greencore management seek a potential purchaser?
I answered that question last week in the Chamber. It did so on its own authority. It is quite within their powers as a public limited company to seek proposals that are in its best strategic interest and then to put such proposals to the Government. It is then up to the Government to decide in favour or against such proposals. The distinction drawn between a bid and an offer was made by Mr. Andreas and not by me. In his letter to the Government stockbrokers he expressed his indications of interest in the purchase of its shareholding in the company and reaffirmed ADM's position, which was expressed to me at the meeting of 17 February to purchase 29.9 per cent of the shares. It is well documented policy of the ADM company — this has since been brought to my attention — not to get involved in bids but to put forward proposals and then negotiate from that position. I think only one newspaper report mentioned a price per share and all the other newspapers' reports interpreted correctly what I has said; what Mr. Davy, who is acting for the Department of Finance in this matter said and what Mr. Andreas said. Only one newspaper article I saw mentioned share prices and while I responded to that in a radio interview I did not pursue it any further as I did not believe there was any necessity to do so.
If there is to be a second round of questioning, we must be very brief, for obvious reasons.
I will be brief, Sir. Is the Minister saying that he expressly approves of the decision of the Greencore management to tout the State's property in order to get purchasers without either the knowledge or the agreement of the Government? Does he not admit that because of the botch made of this the proposed sale of our share holding should be called off? Will he agree that, in keeping with the thrust of the Culliton report, we should retain it as a strategic interest in what has the capacity to be a major indigenous food company which can expand and create jobs in the Irish economy?
It is not my function to direct Greencore plc as to how it runs its operations.
It is our property.
In response to the Deputy's second question I believe the Government should sell the shares. It will make a decision on who, how and where in due course.
The Minister said he is still open to offers from either of the Irish consortia. Does he agree that such an offer is impossible as long as Greencore plc considers it a hostile bid because effectively it would have to acquire total control of Greencore to make it effective and this would cost some £200 million? What steps does he propose to take to allow an Irish bid so that the management and board of Greencore would not consider it a hostile bid?
There would be difficulties. Deputy Yates is right in saying that some of those involved in putting forward proposals did not want to become involved in a hostile bid. In fairness, however, Greencore plc has done an excellent job in difficult circumstances over the past few years. It has sought the areas it believes to be of strategic advantage to it, particularly milling and malt, because it has reached its maximum potential in flour and sugar quotas. No such proposals have come before the Government. Only one Irish company said it did not want to get involved in a hostile bid; it discussed the matter with Greencore and came to its own conclusions.
Given the confusion that surrounds the proposed sale of these shares, does the Minister accept that he should meet the Greencore management before any further statements are issued to decide on a strategy for the sale of these shares? In a very definitive way the Minister stated in the Chamber that he will decide who may purchase these shares; will he accept that the management should decide who is a suitable partner in the strategic interests of the company and who should purchase the shares? The Minister is wrong to assert that he alone will make that decision.
I called for brevity.
Will the Minister agree that he should consult with the company and that company management must have a direct role in who purchases the shares of Greencore? That would be in the direct interest of the company; to do otherwise would be a step in the wrong direction.
To correct the Deputy, what I said a number of times is that the Government will make a decision and I will bring forward proposals on the matter.
The Minister is splitting hairs.
As I said in a statement last week, the Government will consult with the company prior to making a decision.
When will it decide?
For the Minister's benefit, as a countryman I assure him that if I got an offer for a animal in a mart I would consider it a bid. Did the Minister hear the manager of one of the largest cooperative movements, Pat O'Neill, state on radio today that in the region of £70 million would have to be put forward as a bid or an offer for this shareholding and that time is not on their side in finding that money? Would the Minister not consider that every opportunity should be given to such a marvellous Irish-based organisation to make an offer for these shares?
Every opportunity has been given in this regard. A long time has passed since it became apparent that the Government was going to dispose of its shares in Greencore. Therefore adequate time has been given.
Not under the——
Order, Deputy De Rossa is offering. The Deputy should be very brief.
The Minister indicated that he favours the sale of the Greencore shares. May I ask him if it is now the unanimous view of the Government that these shares should be sold?
The Government will decide on a proposal. In the budget arithmetic, asset sales, including Greencore shares, were envisaged.
That disposes of questions for today.