Blackstone, CD&R explore bids for Ben & Jerry’s owner Magnum, sources say: Reuters exclusive

Pints of Ben & Jerry's ice cream are seen on a shelf at Ideal Fresh Market of Church Ave on March 19, 2024 in the Flatbush neighborhood of Brooklyn borough in New York City. (Photo by Michael M. Santiago/Getty Images)

Blackstone and CD&R are among private equity firms in the early stages of exploring bids for Magnum Ice Cream Company, two sources familiar with the matter told Reuters, less than six months after the owner of Cornetto and Ben & Jerry’s was spun out of Unilever.

The firms are monitoring Magnum’s share price before deciding whether to make a move, the two people said.

Magnum’s shares have fallen from a high of 16.5 euros (US$19.19) earlier this year to trade close to their debut price at about 13 euros. The ice cream maker listed on December 8 with a valuation of about 7.8 billion euros, below analyst expectations of up to 10.8 billion euros. The shares have traded as low as 11 euros.

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British consumer goods giant Unilever, which took nearly two years to list its ice cream brands, retains a 19.9 per cent stake in Magnum and plans to exit within five years.

Deliberations are at an early stage, and both firms are waiting for Magnum to report summer sales before making a decision, one of the sources said. Magnum makes a large share of its revenue during that period. Other private equity firms are also interested, the people added.

Magnum, Unilever, Blackstone and CD&R declined to comment.

Magnum shares jumped nearly 16 per cent after the Reuters report and were on track for their biggest ever daily increase.

Analysts at JPMorgan said tax constraints made the chance of a takeover remote. “Since the separation of Magnum was a tax-free de-merger, the company has agreed to refrain from actions that could create a tax liability,” the analysts said in a note, including for two years being restricted from engaging in transactions such as certain acquisitions or mergers.

A deal to take Magnum private would be the latest in Europe as private equity firms seek to deploy funds after several years of subdued dealmaking.

Magnum is trading in an environment where some shoppers are opting for healthier choices amid a boom in GLP-1 weight-loss drugs.

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However, the company could offer buyout firms a turnaround opportunity through cost cuts and margin expansion, bringing it closer to rival Froneri, the two sources said.

Magnum says it holds about 21 per cent of the US$87 billion global ice cream market, ahead of Froneri’s 11 per cent.

Froneri, a joint venture between PAI Partners and Nestle, secured an investment in October that valued the company at 15 billion euros.

(Reporting by Amy-Jo Crowley and Richa Naidu in London. Editing by Anousha Sakoui, Lisa Jucca and Mark Potter)