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Unilever’s demerged Magnum Ice Cream Company netted a €7.8bn (£6.8bn) valuation on its stock market debut, heavily undershooting early analyst expectations at an initial public offering overshadowed by a long-running spat with the founders of Ben & Jerry’s.
Shares in the ice cream group, which also owns the Cornetto and Wall’s brands, opened 60 cents below the price predicted by brokers on Amsterdam’s Euronext exchange, before rising gently to end the session at the consensus estimate of €12.80 a share.
Analysts had originally expected the newly formed firm – formerly one of five key divisions at consumer goods giant Unilever – to fetch a valuation of roughly €15bn.
Unilever first announced its intention to spin off its ice cream division in March 2024 as part of a wider shake-up of its portfolio away from food towards household and other consumer goods. The announcement, which followed several years of anaemic growth and stodgy sales, brought an end to the company’s hundred-year history making the frozen dessert.
The spun-out entity is now the world’s largest standalone ice cream firm and saw its valuation dragged down by a slew of tracker funds immediately selling the shares inherited from their stake in Unilever. Index-linked funds automatically owned swathes of the ice cream division when it was part of Unilever, the Anglo-Dutch consumer giant and fourth largest constituent on the London Stock Exchange.
But many of those funds automatically dumped their stakes in the firm after Unilever chose Amsterdam for its primary listing, accompanied by secondary listings in London and New York.
“UK index-tracking funds that receive Magnum shares in the spin-off but benchmark against FTSE UK indices are required to sell, which creates some short-term downward pressure on the share price after listing,” said Diana Radu, an equity analyst at Morningstar.
“Still, we remain optimistic on the longer-term outlook. As a standalone company, the ice cream business gains a refreshed management team and a more focused, category-specific strategy. “
Ben & Jerry’s spat continues to overshadow Magnum plans
The firm’s valuation was also weighed down by the escalation of a long-running feud between the ice cream company and the founders of Ben & Jerry’s over its governance. The entrepreneurs behind the ‘Phish Phood’ and ‘Cookie Dough’ ice cream brands have said their firm would “suffer” under the new leadership as it listed, having previously unleashed a string of salvos against their former owner Unilever.
Shortly before his firm’s IPO, Magnum chief executive Peter ter Kulve told the two founders – who are both in their 70s – to move on from spat now the group was an independent company.
“[Their] commitment to the brand, to the causes, has been immense, but at a certain moment you need to hand it over . . . we need to move on,” he told the Financial Times.
The market debut took place a month later than planned, after its float was delayed because of the US government shutdown. The political impasse, which ended last month after some 43 days, prevented the US Securities and Exchange Commission from ratifying the group’s application to be traded on the New York Stock Exchange.