Magnum Ice Cream Nv (NYSE:MICC) experienced a notable uptick in trading on Friday after reports surfaced that private equity buyers were assessing possible offers for the recently listed ice cream producer. Shares in the company rose 10.9% in U.S. premarket trading and climbed 10.5% in European markets, according to published reports.
The potential suitors named in the coverage include Blackstone and Clayton, Dubilier & Rice, both of which are reportedly in the preliminary stages of evaluating bids for the owner of the Ben & Jerry's and Cornetto brands. Sources familiar with the matter said both private equity groups are watching Magnum’s share price closely before choosing whether to move forward. The same reporting noted that additional private equity firms have expressed interest as well.
Magnum’s stock has struggled since its peak earlier in the year, sliding from a yearly high of c16.5 to levels close to its initial public offering price of c13. After the private equity interest was reported, the share price moved to c14.37 as of 8:40 am ET.
The company went public on December 8 with a valuation of c7.8 billion, a figure that the coverage said fell short of earlier analyst expectations. As part of the transaction and preceding corporate reorganization, Unilever retains a 19.9% stake in Magnum following a spin-off process that reportedly took nearly two years to prepare. Unilever has stated publicly that it intends to exit the investment completely within the next five years.
Sources cited in the reporting indicated that deliberations among potential bidders are likely to continue into the third quarter. Prospective buyers are said to be waiting for Magnum to release its critical summer sales figures, which are considered essential to properly valuing the company because the business generates the majority of its revenue during that seasonal period.
From a strategic perspective, the report suggested that a private equity acquisition could present a substantial turnaround opportunity. Buyout firms could pursue aggressive cost reductions and margin expansion as levers to improve profitability. In the global market, Magnum is described as holding a 21% share of the $87 billion ice cream sector, maintaining a lead over its rival Froneri.
The situation remains in flux, with early-stage interest and share-price monitoring characterizing the current phase. Market participants and potential acquirers appear to be positioning themselves while awaiting more definitive operational data from Magnum ahead of any firm offers.