Daniel Maia 2/26/2011

BEN & JERRY’S HOMEMADE

EXECUTIVE SUMMARY

RECOMMENDATION

Based upon the information presented in the report, it is advised to reject the proposed bids from the outside companies.

ALTERNATIVES

The biggest concern in this case is finding an appropriate balance between the social commitment and valuing stock holder equity. By over valuing stockholder equity there is a risk of a negative impact to the company both financially and in the media. However there are offers available from other companies that would look to suit an appropriate balance. Offers from Chartwell and Dreyer’s Grand allow Ben & Jerry’s to maintain a balance between the social aspects and financial due to the minimal changes in management and control. Henry Morgan believes that the social mission would not endure a takeover by another company because the focal point would adjust to maximizing shareholder value, but with Dreyer’s Grand proposal it allows peace of mind with its balanced approach. Assuming the stock price goes from its current price of $21, compared to the offer of $31 from Dryer’s Grand it would increase stockholder equity from 189.4 mm. The stock price increasing from $21 to $31 would is a 48% gain in worth. I am able to obtain that Dryer’s Grand’s P/E ratio 47.2%; shows that the company strives to maximize the shareholder value consistently over time. Dreyer’s Grand’s P/E ratio in comparison to Ben & Jerry’s P/E of 19.8% would instill confidence to investors due to the availability of potential future growth of Ben & Jerry’s. Additionally to the potential financial growth Dreyer’s Grand’s proposal of keeping the current management would allow Ben & Jerry’s social commitment to maintain as a high priority.

STRENGTHS OF RECOMMENDATION

From an outside company’s position, Ben & Jerry’s deem to be a company with an opportunity of ample future growth financially. However, the bidding company’s proposals designed for acquiring Ben & Jerry’s creates a dicey tradeoff between money and sustain Ben & Jerry’s social commitment. These tradeoffs pose an uncertainty in the company’s future due to the potential controversy it will stir up in the media, caused by the conflicting company objectives just to achieve greater wealth with a hostile takeover. It is imperative to recognize the Ben & Jerry’s original intention in starting up the company. From examining the available offers it is clear that the proposals look to restructure the company in a way that will challenge Ben & Jerry’s reputable integrity as well as distinguished practicalities.

1First I did: Total Stock of 756,189 * $21

*Looking to see if it would come to 89.4mm. But it did notThen I was going to:

Total Stock of 756,189 * $31 & then subtract the $21 to get the difference

Daniel Maia 2/26/2011

LIMITATIONS OF RECOMMENDATION

As noted in the report Ben & Jerry’s commitment socially was at the core in the company’s founding. It is important to identify a possibility of the shareholders holding onto the company’s stock is due to the social implications mixed amid the stock’s value. Assuming a takeover occurring and having a negative impact with Ben & Jerry’s shareholders due to the company’s initial principles being in jeopardy of change, a backlash is likely to occur. This possibility alerts the shareholders that the company may be in trouble and lower their confidence in the company’s stock value. Eventually the selling of the shareholders shares is eminent due to the shareholder’s lack of profitability and unsteady price of stock. In response to shareholders actions, the price of the company’s stock will lose value and the ongoing domino effect can lead to reduced interest from possible future investors. The likelihood of this scenario arising is an excessive example which would however most likely not occur. Conversely this scenario presents management for potential problems in the future so if such an extreme case happens, management will be able to handle the problem.

Daniel Maia 2/26/2011