The grey market for Kerry Co-op shares has almost entirely dried up, the Irish Farmers Journal understands. Prior to the recently introduced share redemption scheme, the only liquidity in Kerry Co-op shares was via a grey market where Kerry Co-op shares traded for around €300/share.

However, since the introduction of the share redemption scheme in June by the board of Kerry Co-op, the grey market has almost dried up with only a handful of buyers still interested in the shares.

The Irish Farmers Journal understands that these buyers are a very small number of wealthy investors who are operating self-administered pension funds.

Price rise

Since the introduction of the share redemption scheme, which saw Kerry Co-op shares valued at almost €620 each, the grey market price of Kerry Co-op shares has risen to €500/share.

This increase in the grey market share price will likely be used by Revenue for all future calculations relating to inheritance/gift tax on Kerry Co-op shares.

Investors with self-administered pension funds are seeking to buy Kerry Co-op shares for €500/share and then redeem the shares for a higher price in November when the share redemption scheme reopens once more. Self-administered pension funds are exempt from paying tax on the redemption of co-op shares, unlike ordinary farmer shareholders.

Based on Kerry Group’s share prices this week (€109), a single Kerry Co-op share is currently valued at more than €640, meaning these investors can turn a quick profit on Kerry Co-op shares bought at €500 each.

The Irish Farmers Journal also understands that these private investors operating self-administered pension funds were the big winners from the first window of Kerry Co-op’s share redemption scheme, which saw €88m paid out on shares cashed in.

Millions

According to some financial advisers in Kerry, self-administered pension funds accounted for between 80% and 90% of the applications they handled for the share redemption scheme, with many of these investors walking away with cheques for millions of euro.