Ben & Jerry's

I. Introduction
a. Ben & Jerry’s Homemade was on the table for takeover by other firms; specifically four, Dreyer’s, Unilever, Meadowbrook Lane and Chartwell. With the increased competitive market and declining financial performance, takeover bids were coming in. Co-founders Ben Cohen and Jerry Greenfield knew that in order for B&J to maintain its social stature, it would need to remain an independent company; but chief executive Perry Odak felt that the shareholders would be best served by selling the company.
II. Key Issues/Problems
a. With multiple takeover offers, which one would be in the best interests of the shareholders and the rest of the company?
III. Key Questions
a. What position should Morgan take and what might be the implications? What should guide his decision?
b. What would your management scorecard include as you assess Ben and Jerry’s performance? How have they performed on each dimension?
c. Who controls the assets of Ben and Jerry’s?
IV. Analyses
The biggest question is what should Morgan do with all the takeover bids? Being that Morgan is a retired dean of Boston University business school, he is well versed in the business world. From this, he should consider Odak’s comment about doing what is best for the shareholders of Ben & Jerry’s. If we simply look at the P/E ratio of B&J in Exhibit 6 of the case, which is 19.8, and compare that to the offers being presented by the four bidders here’s what we have:
• Dreyer’s Grand - $31 / $1.06 = 29.24 (stock)
• Unilever - $36 / $1.06 = 33.96 (cash)
• Meadowbrook Lane - $32 / $1.06 = 30.18 (cash)
• Chartwell – minority investment of $30 - $50 million
The P/E numbers above show that Unilever would bring in a large investment and also be right for shareholders of B&J. Unilever would be paying a $15 premium over the pre-offer announcement share price of $21. If Morgan takes the