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Unilever Plc\u2019s spinoff The Magnum Ice Cream Co was valued lower than some analysts expected in its debut on Monday, as the world\u2019s biggest ice cream company looks to revive its performance as a standalone firm.<\/p>\n
Magnum shares opened at \u20ac12.20 in Amsterdam on Monday, before rising to trade slightly above the technical reference price of \u20ac12.80, which gave the company a market value of \u20ac7.9 billion. Shares also opened in London, and were set to start trading in New York later Monday as part of the triple listing.<\/p>\n
Steady early trading indicates investors were aligned with the lower-than-expected market capitalisation. Analysts said the valuation balanced so-called flow back \u2014 when investors are forced to sell because they\u2019ve been handed shares that fall outside of their mandate of tracking benchmarks \u2014 and expectations around the firm\u2019s future prospects.<\/p>\n
\u201cBy making the valuation attractive, it means that you attract a few more investors looking for the medium-term growth story, and take away the pressure from the index-related companies that have to sell,\u201d said Fernand de Boer, an analyst at Degroof Petercam, who expected a reference price of \u20ac15. The reference price was set by Magnum and Unilever\u2019s advisors as an indicative level ahead of the debut.<\/p>\n
Unlike Unilever, Magnum is not expected to be included in the UK\u2019s FTSE 100 index or the Stoxx Europe 50 index, meaning funds designed to track those benchmarks may be forced to sell the shares. In total there will be an expected selling of about 30 million shares as a result of index changes, JPMorgan Chase & Co analysts led by Pankaj Gupta wrote in a note last month. The company will have about 612.3 million shares in issue, filings show.<\/p>\n
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The market capitalisation was also lower than expectations set by analysts at Oddo BHF and Barclays Plc.<\/p>\n
\u201cWe assume a more settled price won\u2019t be established until at least next week,\u201d David Hayes, managing director of consumer staples research at Jefferies Financial Group Inc said. The trading price is in the middle of the \u20ac10 to \u20ac15.5 range the bank published on Friday.<\/p>\n
The company, which owns the Ben & Jerry\u2019s and Cornetto brands, is debuting a month later than initially planned after the listing was delayed by the US government shutdown. Magnum is planning to use its newfound independence to focus on boosting its growth, after having been Unilever\u2019s least profitable division.<\/p>\n
\u201cOur mission is very clear: the business was not growing fast enough. It needed to grow 1% to 2% faster and profitability was 400, 500 basis points too low,\u201d Magnum\u2019s chief executive officer Peter ter Kulve said in an interview Monday morning before markets opened.<\/p>\n
Ice cream is \u201cperceived to have challenges\u201d from health-conscious consumers and weight-loss drugs, as well as being a capital-intensive business, Jefferies analysts, including Hayes, wrote in a note last week. But they see the management team as \u201cwell regarded\u201d and say the company can now reinvest in growth, after focusing on returns and cash under Unilever.<\/p>\n
For Unilever\u2019s shareholders, the spinoff comes after years of lacklustre share price performance. Its stock opened trading at \u00a343.42 per share in London on Monday. Investors are being handed one share in Magnum for every five shares they own in the parent company.<\/p>\n
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Unilever decided to split off its ice cream unit last year as part of efforts to streamline its business and revive growth. The unit was briefly considered for sale to a private equity firm, but Unilever ultimately settled on a three-exchange spinoff.<\/p>\n
The ice cream business\u2019 high production and storage costs have weighed on margins in recent years. Magnum is targeting annual organic sales growth of 3% to 5% from next year, broadly in line with the global market, and free cash flow of between \u20ac800 million and \u20ac1 billion in 2028 and 2029.<\/p>\n
Shares are trading under the symbol MICC.<\/p>\n
\u00a9 2025 Bloomberg<\/p>\n
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