Case Study of Ben&Jerry
Case Study: Ben & Jerry’s Homemade (Case 3)
This case focuses on the issues of asset control of Ben & Jerry’s Homemade, Inc with the four outstanding takeover offers by Dreyer’s Grand, Unilever, Meadowbrook Lane Capital and Chartwell Investment in 2001.
Through the analysis of the four offers, I suggest the Board accept the Unilever’s offer. The advantage and disadvantage of each offer is discussed following.
Dreyer’s Grand
The offer does not maximize the shareholders wealth but retain the management philosophy.
It is the best offer for Ben & Jerry’s management since the management team is maintained. In addition, Dreyer’s was also involved in community-service activities. It implies that the social drive will be strengthened after the acquisition offered by Dreyer’s Grand.
However, the $31 per share offer is much less attractive than other rest offers from the shareholders perspective. In stock transaction, Ben & Jerry will share the synergy risk with the Dreyer’s Grand.
Unilever
The offer maximizes the shareholders wealth but disturbs the management philosophy.
Unilever, as a profit oriented organization, may not encourage the philanthropy that is so important to B&J. There is a threat over the management philosophy. However, Unilever maintain select members of B&J management team. The select management team may influence policies to some extent.
The offer with $36 per share in cash is the best case scenario to shareholders. It gives a premium of $15 per share.
Meadowbrook Lane Capital
The offer does not maximize the shareholders wealth and disturbs the management philosophy.
Meadowbrook Lane will install new management team. Even though they will maintain select social projects and interests, the three objectives will be disregarded. Besides, the offer with $32 per share in cash is less attractive than Unilever’s offer which offers a premium of another $4 per share.
Chartwell Investments
The offer does not maximize the
This case focuses on the issues of asset control of Ben & Jerry’s Homemade, Inc with the four outstanding takeover offers by Dreyer’s Grand, Unilever, Meadowbrook Lane Capital and Chartwell Investment in 2001.
Through the analysis of the four offers, I suggest the Board accept the Unilever’s offer. The advantage and disadvantage of each offer is discussed following.
Dreyer’s Grand
The offer does not maximize the shareholders wealth but retain the management philosophy.
It is the best offer for Ben & Jerry’s management since the management team is maintained. In addition, Dreyer’s was also involved in community-service activities. It implies that the social drive will be strengthened after the acquisition offered by Dreyer’s Grand.
However, the $31 per share offer is much less attractive than other rest offers from the shareholders perspective. In stock transaction, Ben & Jerry will share the synergy risk with the Dreyer’s Grand.
Unilever
The offer maximizes the shareholders wealth but disturbs the management philosophy.
Unilever, as a profit oriented organization, may not encourage the philanthropy that is so important to B&J. There is a threat over the management philosophy. However, Unilever maintain select members of B&J management team. The select management team may influence policies to some extent.
The offer with $36 per share in cash is the best case scenario to shareholders. It gives a premium of $15 per share.
Meadowbrook Lane Capital
The offer does not maximize the shareholders wealth and disturbs the management philosophy.
Meadowbrook Lane will install new management team. Even though they will maintain select social projects and interests, the three objectives will be disregarded. Besides, the offer with $32 per share in cash is less attractive than Unilever’s offer which offers a premium of another $4 per share.
Chartwell Investments
The offer does not maximize the