Ben & Jerry's needs resolution to the following issues: How did Ben & Jerry's become a takeover target? Should Morgan support a takeover?

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Ben & Jerry’s

Problem Statement

Ben & Jerry’s needs resolution to the following issues:

  • How did Ben & Jerry’s become a takeover target?
  • Should Morgan support a takeover?
  • If so, by who, and at what price?
  • If not, why not?

If the company is not generating value for its shareholders consistently, it might consider the various takeover-offers on the table.

To evaluate this we need to consider impacts on the company’s ability to operate independently to carry out the threefold corporate mission (Product, Economic and Social).

This document will offer both detailed analysis to evaluate this problem and recommendations for moving forward.

Current Financial Analysis

With the formation of ice-cream joint venture by Pillsbury and Nestle, Pillsbury distribution channel was no longer advantageous for Ben & Jerry’s.

Despite the 45% market share in super premium ice-cream market and the great brand equity, the company has been consistently under-performing and its share price has not seen any changes from its current price of $21.

The average shareholder’s return on equity is about 7%, far below the industry-required rate of return.

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The company’s extremely generous charitable donations of 7.5% of pre-tax earnings and other social gains have had serious impacts on its profits.

Ben & Jerry’s has to find ways to create value for its shareholders.

Takeover Offers

The takeover offers that Ben & Jerry’s currently has on the table are above its current share price of $21, indicating that the company is under valued.

The various asset control charters, legislatures and other defense mechanisms gives the company authority to accept or reject the takeover offers that have been made so far.

See Exhibit 1 for Pros and ...

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