Socially conscious' investors take on giants to save Ben & Jerry's - Brief Article

Eurofood, Feb 17, 2000

A group of socially conscious' investors is banding together in a bid to save the Vermont ice cream manufacturer, Ben & Jerry's Homemade Inc., as famous for its ethically responsible image as for outlandish flavours such as Phish Food, Wavy Gravy and Chunky Monkey. At the end of last year it emerged that Ben & Jerry's had received "indications of interest to acquire the company," at a price substantially above its 1 December closing price of US$21/share (see Eurofood, 16 December 1999, p10). Potential suitors were said to include Anglo-Dutch conglomerate Unilever, Nestle of Switzerland and Dreyer's Grand Ice Cream of California.

The group of 17 investors is led by Meadowbrook Lane Capital and also includes Chartwell Investments and a number of well known individuals such as Anita Roddick, president of the BodyShop chain of natural skincare products. Apart from confirming that they are working on a deal that would enable the ice cream maker to preserve its commitment to social mission and working standards, the group of investors is keeping quiet. However, an unconfirmed leak thought to originate from a Ben & Jerry's shareholder revealed that the group was offering US$32 per share, while Unilever had offered US$40 per share.

COULD GO EITHER WAY

Ben Cohen, who co-founded the company with childhood friend Jerry Greenfield, told The Wall Street Journal that there was logic behind a socially responsible group trying to keep his company independent. "Quirky brands don't usually do well as part of large conglomerates," Cohen said. "I'm delighted there's an investor group trying to find a way to keep the company independent." However, in big business it is rare that the bidder offering substantially less cash walks off with the prize, and the Meadowbrook consortium may have to up its offer if it is to take on the rumoured bid from Unilever. On the other hand, both shareholders and directors are likely to show great sympathy for an offer stressing a commitment to keeping the Ben & Jerry's ethos alive and may accept a lower bid with this in mind -- so watch this space.