Magnum Ice Cream shares surge on report of PE buyout interest

Investing.com -- Magnum Ice Cream Nv (NYSE: MICC) shares jumped 10.9% in U.S. premarket trading and 10.5% in European markets on Friday following reports of potential private equity interest. Blackstone and Clayton, Dubilier & Rice are reportedly exploring bids for the owner of the Ben & Jerry's and Cornetto brands.

The firms are currently in the early stages of evaluating offers for the recently listed ice cream manufacturer. According to Reuters, citing sources familiar with the matter, both private equity groups are monitoring the share price before deciding whether to proceed. Other private equity firms are also interested, the report stated.

Magnum’s stock has struggled recently, declining from a yearly high of €16.5 to trade near its debut price of €13. Following the report, Magnum's stock has moved to the €14.37, as of 8:40 am ET. The company was listed on December 8 with a €7.8 billion valuation, a figure that fell short of initial analyst expectations.

Unilever retains a 19.9% stake in the business following a complex spin-off process that took nearly two years to prepare. The consumer goods giant has publicly stated its intention to fully exit the investment within the next five years.

Deliberations are expected to continue through the third quarter as suitors wait for Magnum to report its critical summer sales figures. One source noted that because the company generates the bulk of its revenue during this period, the data is essential for valuation.

The potential acquisition could offer buyout firms a significant turnaround opportunity through aggressive cost-cutting measures and margin expansion. Magnum currently holds 21% of the $87 billion global ice cream market, maintaining a lead over its rival Froneri.

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