In a deal that could potentially change the image of the "scoop shop" Dartmouth students know and love, Ben & Jerry's Homemade Inc. is now considering a buyout offer from Meadowbrook Lane Capital.
Ben & Jerry's was founded in 1978 in a renovated gas station in Burlington, Vt. by childhood buddies Ben Cohen and Jerry Greenfield, and since then, the company has become known for its unique quirkiness.
Most notable of these characteristics is that the company annually donates to non-profit organizations 7.5 percent of all pre-tax earnings through the foundation it created, employee community action teams and corporate grants. The company's website explains that the funds aim toward "creative problem solving and hopefulness."
The Northampton, Mass. based Meadowbrook is an umbrella group that claims to be "socially responsible" and up to the challenge of maintaining Ben & Jerry's well-known social vigilance.
The manager of Hanover's Ben & Jerry's store Vic Hall said most local owners are involved with the ice cream company in part because of its social activism.
Almost all of the students interviewed by The Dartmouth were aware of the company's image and expressed concern that a buyout would affect the company's ideals.
"Ben & Jerry's just kind of has a reputation of being a small company, treating their workers well and caring about what products they put into their ice cream," Ben Bell '00 said.
Sara Becker '00 similarly said, "I think the appeal of the company is that it's owned by these two gentlemen who have a consumer-friendly connotation."
Becker acknowledged that she was not an ice cream expert, but she said "the whole brand image" is an important aspect of the designer ice cream's appeal.
The students interviewed by the Dartmouth were, for the most part, hesitant to say whether a corporate buyout would affect their average rates of ice cream consumption, but some said such a takeover would ruin the company's image.
Becker said if Ben & Jerry's were owned by a larger corporation, she would be "less inclined to give them [her] money or support."
That is just the worry for nonprofit groups, franchise owners and ice cream supporters across the country, as well as Vermont politicians, who have joined in vocal protests against any possible takeover. They claim that a big corporation would not have the same commitment to pursuing social causes such as saving the rain forests, helping the homeless and aiding local businesses.
"There are some franchise owners that have said that if a different leadership takes over the corporation, they might sell their franchise," Hall explained.
However, he said a lot of Ben & Jerry's future success rides on the public's perception of the company.
"As long as the business could retain its commitment to its social values, which some people think would not happen with a corporate takeover, I think it would be all right," Hall said.
Currently, Meadowbrook and Ben & Jerry's are in private negotiations, but according to a copy of a letter dated Feb. 4 on Meadowbrook Lane Capital letterhead, the group is offering $32 a share, or $268 million, for the ice cream company. As part of the takeover, the company would also get a new board and a new chief executive and become a private company.
The ice cream company has received multiple buyout offers in the past few months. Chartwell Investments, which typically invests in basic industry, said it would be able to facilitate distribution. Dreyer's Grand Ice Cream Inc., an Oakland, Calif.-based ice cream maker, reportedly made an offer on Feb. 2. Unilever P.L.C., which owns the Breyer's ice cream brand, also has offered to buy Ben & Jerry's.
Ben & Jerry's stock price has been sluggish for the last seven years. After going public in 1986, it hit its peak at $30.50 a share in 1992, and then fell to $12 in 1997. That year, Ben & Jerry's said it would hire a new chief executive.
It conducted a much-publicized, nationwide search before settling on Robert Holland, a McKinsey Company consultant, who was replaced less than two years later by Perry D. Odak, the current chief executive.
The Meadowbrook proposal would replace the existing board with food and finance-savvy individuals. The group says it would continue financing Ben & Jerry's foundation.
For now, Hall said the companies are in negotiations and little information is available to the public.
