The case study describes how Ben & Jerrys Homemade (Ben & Jerrys), an industry leader in the super-premium segment of the ice cream market, faces the process of considering different takeover offers from larger companies. Companys low rates of return on shareholders equity over the course of several years provoked dissatisfaction among some shareholders, including Perry Odak, the companys CEO and owner of a significant portion of shares (5,5%). Therefore, the board of directors has to decide to either continue running Ben & Jerrys as an independent company or accept one of the takeover offers to improve its financial performance. However, although the Unilevers offer is the most generous, it may not be the best takeover option to pursue since it will require abandoning companys social projects and focusing on high return rates. Therefore, Ben & Jerrys should either decline all takeover offers or accept the one from Dreyers Grand as the most suitable under the present circumstances.


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The analysis of the companys history, as well as financial and social performance, demonstrates that while Ben & Jerrys delivers a high-quality product and engages in worthwhile environmental and community projects, it does not necessarily operates in the best interests of shareholders. Although the company reports growing sales and earnings, rates of return remain very low in accordance with the industry standards. Therefore, the solution seems to be declining Unilevers offer and choosing one of the two options. The first one is to accept the Dreyers Grands takeover option since it allows retaining the current management, diversifying the companys stock portfolio, and continuing social projects. The second option is to decline takeover offers and remain an independent organization.


1. The analysis demonstrates that Ben & Jerrys fulfilled some parts of its mission statement better than others. The companys mission statement consists of three goals, product-related, economic, and social. The first mission is to market a high-quality natural ice cream made from locally produced ingredients. The company fulfilled this part with excellence since Ben & Jerrys used local products to make a premium-quality ice cream that was considered one of the best in the super-premium segment. The economic mission was to increase the value for shareholders, create financial rewards and career opportunities for employees, and to run the company based on sound financial principles of profitable development. When Ben & Jerrys created employment and career opportunities, the companys average return on shareholders equity was 5-7%, a very low rate according to the industry standards. Therefore, the economic element of the mission statement was not fulfilled very well. The social part of the mission statement was to run the company in a way that would improve the quality of life of communities on local, national, and global levels. Ben & Jerrys fulfilled this part of the mission with excellence since the company supported Greenpeace International and the Vietnam Veterans of America Foundation, donated 7,5% of its pretax income to social and community causes, used products grown in a sustainable way, and made an effort to minimize volumes of wastewater.

2. There seem to be several reasons why Ben & Jerrys became a takeover target. First, increased competitive pressure and a subsequent decline in the financial performance of the company attracted a number of takeover offers. Second, Perry Odak, a chief executive of Ben & Jerrys, was convinced that the interests of shareholders would be best served by selling the company to the bidder on the most beneficial terms since it provided low return on shareholders equity (5-7%). Third, some other board members also felt that the companys financial performance would improve under control of a firm that could find new and better ways to create value or practice a corporate culture without supporting significant commitment to social and community causes. Described factors were reasons why Ben & Jerrys became a takeover target.

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3. The analysis shows that the current takeover offers are justifiable. When the company issued shares, the price per share was $10.50. At the time when the turnover was high, Ben & Jerrys shares were traded at $21 per share. At that price, the companys stock stayed at the same level despite regular increases in sales and earnings. For a firm that operated in the super-premium segment, had a great brand name, demonstrated successful expansion efforts and rollouts of new products, return should have been better. Therefore, it seems that the companys stock was undervalued at that moment. Thus, the current takeover offers are justifiable since Ben & Jerrys has a great potential for growth. Consequently, an offering price of $31-36 per share seems reasonable, reflecting the companys potential to generate revenue, expand, and create value.

4. Although as company leaders, Ben and Jerry seemed to practice good corporate governance overall, they did not exert sufficient effort to increase shareholders return. For example, in the interview given by Cohen to The Wall Street Journal, he acknowledges that he has neither short-term or long-term forecasts for an increase in earnings, nor an idea of what the companys capital spending will be in the next five years. Furthermore, Cohen believed that stock market changes were not related to companys financial performance. Apparently, a leader who holds such attitudes towards the stock market and long-term development may not be the best facilitator of corporate governance that is good for shareholders. Therefore, takeover defense strategies may represent good corporate governance since they will serve in shareholders best interests. However, there are two sides of this issue. For example, although current corporate governance does not result in high return rates, it pursues greater good for the local and global communities and places great emphasis on environmental performance and corporate social responsibility. Therefore, both takeover defense and opposition strategies may be viewed as good corporate governance depending on ones perspective, priorities, values, and management style.

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5. As a member of the board of directors of Ben and Jerrys Homemade, Henry Morgan has a choice to either defend the agenda of the current management team to keep running the company as an independent organization or support one of the acquisition offers. It seems that he can take one of the three positions. The first one is to support the position of the current management team. The second one is to pursue the takeover course by accepting an offer of the highest bidder. The third path is to pursue a takeover option that allows a greater degree of independence and maintaining high involvement in social and community projects. Although the offer of $36 in cash per share from Unilever appears the best one, Henry Morgan should not defend it since the merger with Unilever is going to make Ben and Jerrys part of a big corporation focused on maximizing profit by restricting social projects. Therefore, Morgan should defend a strategy that is the closest to the one that has made Ben and Jerrys a successful company, either declining all takeover offers or choosing the one from Dreyers Grand, since this takeover involves retaining the current management team and running Ben and Jerrys as an autonomous business unit and encourages social endeavors. Also, Dreyers Grands payment with stocks may allow Ben and Jerrys shareholders to diversify their stock portfolio and encourage the management to engage more actively in stock-related operations.

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