GLANBIA FARMERS VOTE ON PROPOSED DEAL TODAY - Glanbia's 8,200 co-operative shareholders will decide today whether or not to back a €343m bid for the plc's Irish milk operations. The vote, which needs a 75% majority, would give the farmers control of the Irish dairy operations. Their shareholding in the plc would drop from 55% to about 10%.
Pat O'Keeffe, the news editor at The Farmers Journal, says there has been a huge level of engagement with farmers going into the meetings and asking a lot of hard questions. He says they have really pressed the Glanbia board to explain why this proposal is being brought forward and to defend the price being paid. The figure of €343m for the deal is based on the last number of years' earnings for the Irish dairy business that is transferred across in the proposed transaction. Farmers have gone through that figure line by line, especially with regard to the pension deficit and the ability of the co-op to be strong and debt free and to in a position to invest in growth in the future.
Mr O'Keeffe says that Glanbia's operations spread from Co Louth down to east Cork and within that belt, farmers have some of the best land in Ireland. He says that about 1,200 grain farmers sell grain to the company, while over 4,200 dairy farmers - or a quarter of the country's dairy farmers - sell their produce to the firm. Farmers who trade with the company also have a vote at today's meeting.
He says the price being paid is the biggest hurdle to the vote going through, but international experience suggests that co-operative ownership is best for farmers.
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MARATHON TALKS RESULT IN €700+ BILLION IN AID FOR EURO ZONE - After 11 hours of talks, the EU and the IMF agreed an emergency funding facility worth as much as €720 billion in loan guarantees and credits to stabilise the euro zone before financial markets open. Euro zone governments agreed to finance a €500 billion emergency facility for the euro area, while the IMF committed a further €220 billion. The European Central Bank is also set to play a big role buying eurozone government debt.
The ECB says it will intervene in government bond markets and other central banks around the world also announced they would restore currency swap agreements that were introduced earlier during the financial crisis, in an attempt to ease the strain on banks caused by the European sovereign debt crisis. It is hoped the joint decision by the US Federal Reserve, the European Central Bank, the Bank of England, the Bank of Canada, and the Swiss National Bank will combat escalating financial market tensions.
The move to buy government and private assets to ease market tensions is a dramatic turnaround for the ECB. Previously it had opposed measures which blurred the boundary between fiscal and monetary policy. No limits were set on the level of purchases but the ECB said the objective was to 'address the malfunctioning of securities' rather than to help governments.
Over the weekend Anders Borg, the Swedish Finance Minister, described the financial markets as a 'wolfpack'. So far this morning, the reaction on the markets to the emergency moves has been quite positive. Asian stocks, US index futures and the euro surged after the package was unveiled.
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MORNING BRIEFS - Aer Lingus' total passenger numbers in April 2010 fell by 27% to 689,000, compared to April 2009. Short haul fell 26% and long haul was 35% lower. The airline says that as a consequence of the disruptions caused by the ash clouds, there were seven days last month where Aer Lingus did not operate all of its scheduled flights.
*** The euro gained over 2% against the dollar after news of the euro zone aid package broke. This morning it is trading at $1.2905 cents and 86.82 pence sterling.
