Unilever’s demerged Magnum Ice Cream Company achieved a valuation of €7.8bn (£6.8bn) upon its stock market debut, significantly below initial analyst expectations. The initial public offering was overshadowed by a protracted disagreement 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 lower than broker predictions on Amsterdam’s Euronext exchange. The shares then rose slightly to close at the consensus estimate of €12.80 each.
Analysts had originally anticipated that the newly established firm, previously one of five key divisions at consumer goods giant Unilever, would reach a valuation of approximately €15bn.
Unilever announced its plan to spin off its ice cream division in March 2024 as part of a broader strategy to shift its portfolio focus away from food towards household and other consumer goods. This decision marked the end of the company’s century-long history in frozen desserts.
The spun-out entity is now the largest standalone ice cream firm globally, but its valuation was negatively impacted by a wave of tracker funds selling shares inherited from their Unilever stakes. Index-linked funds automatically owned portions of the ice cream division when it was part of Unilever, the Anglo-Dutch consumer giant and the fourth-largest constituent on the London Stock Exchange.
Many of these funds sold their stakes after Unilever chose Amsterdam for its primary listing, with secondary listings in London and New York. Diana Radu, an equity analyst at Morningstar, noted, “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.” She added, “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.”
The firm’s valuation was also affected by the escalation of a long-standing feud between the ice cream company and the founders of Ben & Jerry’s concerning its governance. The entrepreneurs behind the ‘Phish Phood’ and ‘Cookie Dough’ ice cream brands have expressed concerns that their firm would “suffer” under the new leadership as it listed, having previously criticised their former owner Unilever.
Shortly before the IPO, Magnum’s chief executive, Peter ter Kulve, urged the two founders — both in their 70s — to move on from the dispute now that the group is 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 occurred a month later than planned, as its float was delayed due to the US government shutdown. The political impasse, which concluded last month after 43 days, prevented the US Securities and Exchange Commission from ratifying the group’s application to be traded on the New York Stock Exchange.
