Shares in Glanbia recovered much some lost ground after the foods group tempered disappointment at the failure of its Irish dairy sale by hiking its profits forecast.

The Irish-based milk-to-nutritional supplements company doubled to a "mid-teens" percentage, from 6-8%, its estimate for growth in earnings this year.

The forecast, which was higher than analysts had pencilled in, helped limit to 5.0% the loss in Glanbia shares in morning trade, investors' first chance to react to news late on Monday that the sale of the group's Irish dairy processing and agricultural businesses had fallen through.

The shares jumped more than 15% after the E300m-plus disposal plans were revealed two months ago, in part because investors injected a premium to reflect increased hopes of a Glanbia takeover.

The deal would have cut to about 10%, from more than one-half, the Glanbia stake held by the company's biggest shareholder, the Glanbia Co-operative Society, and so denied the co-op a veto over any takeover.

'Performing well'

The group said its raised earnings hopes reflected a "significantly improved" performance at the Irish dairy business, which suffered its first even loss last year.

"Global dairy markets have substantially recovered from the severe downturn experienced in the prior year," Glanbia said, noting also the impact on the business of a drive to cut costs.

The US cheese business was also putting in a "good performance", helped by a market recovery spurred by "robust" demand.

"Overall, the group is performing well year to date," Glanbia said.

Reheated deal? 

John Moloney, the group's managing director, also appeared to hold out the prospect of another attempt to sell the dairy business to the co-operative, which was scuppered when the society's members failed by two percentage points on Monday to give the deal the 75% support required to clear it.

"We got tantalisingly close so I think it does spell out the fact that there was a compelling deal given the high level of support that it got," he said.

"I think what the board of the [co-operative] will be doing is listening closely to members who voted significantly for us. We'll see what that feedback shows."

Davy analyst John O'Reilly said that co-operative's vote "would in most circumstances be considered an overwhelming expression of its acceptance and approval of its terms.

"We do not believe that this can or will be ignored."

The issue would likely "re-emerge and will, perhaps by some other means, be achieved", Mr O'Reilly added.

Glanbia shares closed 5.3% lower at E2.92, after tumbling nearly 8% in early deals.