Upon review, Ben & Jerry’s Homemade should approve the offer from Unilever for $36.00 (cash) per share. In reviewing the offers two questions were presented. The two questions included: the social mission of Ben & Jerry’s surviving a takeover, and maintaining the best interests of the shareholders. To follow, will be the justification for the Unilever offer, alternative offers, and the risks that are involved with a possible takeover. Upon reviewing the four offers, Unilever proposes the best overall offer, in regards to maintaining the interests of the shareholders and the social mission of Ben & Jerry’s. Besides the $36 per share offer price, Unilever has three additional portions to their proposal. Their proposal discusses: management, …show more content…
At $36.00 (cash) per share, it is $4.00 higher than Meadowbrook Lane’s offer of $32 (cash) per share. With Ben & Jerry’s current stock price at $21.00, the $36.00 offer would result in a $15.00 gain on each share, for the shareholders. Looking at the market capitalization of Ben & Jerry’s and Unilever, shows a stark contrast in company size (see Market Cap. Excel). Ben & Jerry’s market capitalization is valued at $158,801,769 or .88% of Unilever’s $18 billion market capitalization, which is the largest of any of the offering …show more content…
However, with some management staying on board, there is a possibility for compromise between the companies, in regards to social contribution (see Social Donation. Excel). If Ben & Jerry’s would lower the percentage of contribution from 7.5% to 5% or lower the amount of donation would have been less than $500,000 in 1999. A compromise in this regard, would benefit Unilever in keeping more profits in house, and help Ben & Jerry’s maintain their reputation of a social
Product: The company produces a physical good – Cookies/Crackers. In doing this, the company became diversified by the use of several product lines, not just one line of cookie or cracker. Also, in acquiring other businesses, the company thought it best to keep the originating firm’s brand name vice-carrying its name on the new product (i.e., Sunshine company). In thins regard, Sunshine’s Cheeze-It cracker line would not risk losing customers who are accustomed to that logo on the product or the name being used in association with the product.
Based on the information in the case, Pepsi could invest US$360 million in exchange for 30% equity of Deltex. So we have to calculate the value of 30% equity of Deltex. First, we calculated the discount factor by using average unlevered beta of US independent bottlers, US 10 year Treasury bond as risk free rate and assuming market risk premium 10%. We came up with 9.83% of WACC. Next, we calculated Deltex free cash flow and terminal value and then converted them into US dollar value. Now with WACC and total cash flow, we had NPV of the company. So we deducted current debt from NPV and came up with the value of US$360M investment equal to 59.99% of Deltex equity. So the proposal to buy 30% of Deltex with US$360M is too expensive to PepsiCo and not attractive to PepsiCo.
The $55 value is on the lower range of the analyst eztimates, with a best guess estimate of $67.94. Since the value of the stock had been below $45 for 4 months, the offer of 55 dollars represented a 29% premium to investors. Bollenbach knew that management would be resistant of any attempt to be acquired, regardless of price, because of failed previous attempts to negotiate a friendly merger at year end 1996. The 55-dollar benchmark created an expectation for ITT management to achieve that level, or higher and the premium is enough to demonstrate to investors it is a real offer. Their support will be key as they will have a vote deciding the fate of the poison pill provisions which need to be removed to make the deal necessary.
There are many valuation methods that could be used to evaluate this company. Finding a method that valuates the stand-alone value is difficult. The stand-alone value should be dependent upon the firm’s own assets and projected future income. We decided to evaluate this company based upon two methods: The Discounted Cash Flow Method and the Comparable Companies Method.
The corporation I chose to discuss is McDonald’s. McDonald’s is a publicly traded corporation that includes the following domestic companies, McDonald’s, Chipotle Mexican Grill, and Boston Market. This paper will discuss the following:
One is required to estimate the economic cost of its social agenda, and evaluate the implications of takeover defence strategies. Ultimately, we have to take a position on whether Ben & Jerry's should continue to independently pursue its social agenda or accept one of the attractive takeover offers and accept a shift toward greater profit orientation.
Many Wall Street analysts considered Krispy Kreme to be overvalued. Analysts said in April 2000 the stock was destined for the $15 to $20 share range at best, which is where most known food related stocks are located. Instead it had been hovering at a value of $40 a share for most of the year. The stock rose to a high of $54 and many analysts doubted Krispy Kreme's strategy and potential growth merited a stock price nearly 70 times projected 2002 earnings per share. I agree with the statement "the numbers just don't work."
In order to understand McDonald's structure and culture and why they continue to be the world's largest restaurant chain we conducted a SWOT analysis that allowed us to consider every dimension involved in the business level and corporate level strategies.
In Best Buy, the Benemundus Group has a great opportunity to take advantage of an undervalued
The purpose of this report is to compare financial reports from the two largest soft drink manufacturers in the world. The Pepsi Co. and Coca Cola have been the industry's leaders in their market since the early 1900's. I will use relevant figures to determine profitability, and break down key ratios in profitability, liquidity, and solvency. By breaking down financial statements, and converting them to percentages and ratios, comparisons can be made between competitors regardless of size.
McDonald's Corporation is the largest fast-food operator in the World and was originally formed in 1955 after Ray Kroc pitched the idea of opening up several restaurants based on the original owned by Dick and Mac McDonald. McDonald's went public in 1965 and introduced its flagship product, the Big Mac, in 1968. Today, McDonald's operates more than 30,000 restaurants in over 100 countries and have one of the world's most widely known brand names. McDonald's sales hit $57 billion company-wide and over $25 billion in the United States in 2006 (S&P).
The transnational corporation Nestle Company founded in 1886 based in Vevey, Switzerland, sells its products in 189 countries and has manufacturing plants in 89 countries around the world, boasting an unmatched geographic presence. The company started off as an alternative to breastmilk and initially looked into other countries for an increase in global opportunities. It founded its first out of country offices in London in 1868, and due to the small size and inability of Switzerland to compensate growth manufacturing plants were built in both Britain and the United states in the late nineteenth century. A large portion of Nestlé’s globalization came in the 1900s which was when it first moved into the chocolate business after
Unilever is a multinational consumer goods company, which includes products like food, beverages, cleaning agents and personal care products. Unilever is the world third largest customer goods company. The brands of Unilever are trustworthy worldwide and because of the feedbacks given by the people, Unilever is stated as one of the most successful customer goods/products companies. Unilever have more than 400 brands which focuses on health and wellbeing, and this is the reason why Unilever has touched so many people lives in many different ways. Unilever collection of varieties varies from nutritionally composed foods to permissive ice creams, inexpensive soaps, comfortable shampoos and everyday domestic care products and goods. Unilever also produces world-leading brands such as Lipton, Knorr, Dove soap, Axe, Blue Band and many more. Unilever is a responsible business as their supportable living strategy sets out to decouple their development from their environmental influence, and at the same time growing their social encouraging influence as well. Their plan has three main aims to achieve by 2020 which are as follows:
Ben Cohen and Jerry Greenfield founded Ben & Jerry's Homemade Ice Cream in 1978. Over the years, Ben & Jerry's evolved into a socially-oriented, independent-minded industry leader in the super-premium ice cream market. The company has had a history of donating 7.5% of its pre-tax earnings to societal and community causes. Ben and Jerry further extended their generosity by offering 75,000 shares at $10.50 per share exclusively to Vermont residents, so that they may help those who first supported the company; Ben and Jerry's wanted residents to profit from their venture as well. In addition, steady growth and a widely recognized brand name helped Ben and Jerry's obtain 45 percent of the premium ice-cream market, yet the company stock price remained stagnant at $21 a share for several years.