Shareholders have valued the Magnum Ice Cream Company at around €7.9bn, as Unilever’s ice cream division made its stock exchange debut in Amsterdam.
Floated at €12.20, shares in the world’s biggest ice cream company rose to a high of €13.09 before settling around the guidance price of €12.80.
CEO Peter ter Kulve said: “Today is a proud milestone for everyone associated with the Magnum Ice Cream Company.
“We became the global leader in ice cream as part of the Unilever family. Now, as an independent listed company, we will be more agile, more focused, and more ambitious than ever.”
Alongside the primary listing in Amsterdam, Magnum will also trade on exchanges in London and New York as part of the demerger from Unilever.
Share price volatility is expected over the coming weeks, as Unilever investors given shares in the new entity trade out, new backers trade in and the stock adjusts to public trading across three exchanges, according to AJ Bell head of markets Dan Coatsworth.
“Unilever shareholders have been given free shares in the ice cream arm and there is a risk that many people will sell them at the first opportunity,” he said.
“It’s perfectly normal for shares in a demerged company to be volatile in the first few weeks of trading as certain investors head for the exit and others take positions. It’s a simple rearranging of the chairs.”
While it is early days, Magnum’s initial €7.8bn market valuation has put it below some market expectations. Barclays analysts predicted in October the company could be valued at €10.1bn-€10.8bn. Others had aimed as high as €15bn.
The company’s primary listing in Amsterdam can also be blamed for the cool valuation, as the stock does not qualify for the London FTSE index – forcing FTSE-tracking funds that were handed shares in the demerger to sell them off.
Unilever’s share price also fell 5.2% this morning in London.
Ben & Jerry’s spat continues
The break from Unilever has likewise been complicated by the continuation of a long-running spat between former Ben & Jerry’s owners Ben Cohen and Jerry Greenfield, with Magnum CEO Peter ter Kulve this week telling The Financial Times the pair needed to “hand over to a new generation”.
Cohen and Greenfield have been vocal critics of how Unilever – and now Magnum – has handled the brand, accusing them of stifling the progressive political vision guaranteed as part of its acquisition agreement in 2000.
The pair have called on Magnum to divest Ben & Jerry’s, so the brand can be free to speak out, and have offered to buy back the brand for $1.5bn-$2bn, according to Reuters.
Palestine is a particularly hot topic, and Ben & Jerry’s has alleged Unilever tried to silence it from describing Israel’s bombing and displacement of Gazans as genocide. Earlier efforts by the brand to stop sales in lands occupied by Israeli settlers were stymied by a sale of the Israeli Ben & Jerry’s business to a local licensee.
Magnum and Unilever have argued the brand’s social mission has crept beyond what was agreed. Magnum is currently trying to remove the chair of Ben & Jerry’s independent board, Anuradha Mittal.
Ter Kulve told Dutch newspaper FD that Cohen and Greenfield’s proposal to buy back their company was a “romantic idea”, but the brand’s management team was not in favour.
“How many people know that the brand has a social mission, and how many people just see the name Ben & Jerry’s on their ice cream? I’m really not worried. It’s just noise,” he added.
However, Cohen said the spin-off would change nothing, and the “heavy-handed tactics” used by its owner would not separate Ben & Jerry’s from its social mission.
“The Ben & Jerry’s community only grows louder, more united, and more determined in calling for true independence,” he said.
“Magnum acknowledges that this campaign challenges its IPO narrative. Its attempts to dismiss our campaign show that they see the risk our vocal community poses to the rest of their ice cream business. This risk can’t be scooped out, and pretending a spin-off will make it disappear shows how deeply they misunderstand this brand and its supporters.
”Ben & Jerry’s cannot thrive under the current corporate structure. If this continues, the brand will suffer. That’s why I’m standing with investors who share our mission and have global fmcg experience to free Ben & Jerry’s, and why tens of thousands of people around the world will continue fighting for its future.”
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