DAIRY Crest, the UK's third-largest milk producer, which operates in England and Wales, plans to float on the stock market at the end of next month.
The company, the milk processing arm of the former Milk Marketing Board, confirmed in its pathfinder prospectus that about 70% of the shares are expected to be allocated to the 27,000 farmers who own it.
It expects to place the other 30% of the shares with City investors. Certain employees will be given some #100 of free shares and will be able to buy a further stake in the company.
The allocation of shares to farmers will be in two forms - a distribution of free shares to those known as eligible producers and an offer to those who are owed a proportion of the #66.6m rolling fund.
The fund represents the total of levies paid by certain farmers to provide working capital and must be reimbursed by next March. These farmers will be able to opt to take shares in exchange.
The company is expected to be valued at about #200m when it floats, but the exact price will not be known until July 31 when the full prospectus is published. The basis of the allocation of shares will be unveiled on August 22 and stock market dealing will start on August 28.
The Residuary Milk Marketing Board, the body responsible for disposing of the Dairy Crest shares, said the publication of the pathfinder prospectus was an ``important step'' in the flotation process.
``I have again written to producers to bring them up to date and to explain the expected timetable and the actions that they will need to be ready to take when the final prospectus is published,'' said RMMB chairman Sir Derek Andrews.
The board sent farmers pre-registration forms when it announced its intention to float on May 29. Yesterday it said the forms showed two-thirds of both eligible producers and rolling fund producers wanted to take their entitlement of shares.
Deregulation of the milk market has forced Dairy Crest to cut capacity along with the rest of the industry, axing 21 out of 32 plants and slashing the workforce to 4000 from 13,000, as doorstep deliveries have shrunk.
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