Ben & Jerry's

TO: HENRY MORGAN, BOARD MEMBER, BEN & JERRY’S HOMEMADE.

FROM: , MARKET ANALYST

SUBJECT: FORTHCOMING CHANGES REGARDING FINANCES

DATE: 2/1/2000

Executive Summary:

As we enter the second month of 2000, and with improved net margins, asset turnover and return on equity on the books, Ben & Jerry’s clearly must place a renewed importance on its position in the frozen dessert industry relative to its largest peers: Dreyer’s, Unilever, Yocream, et al. Attractive buyout proposals from various entities with varying degrees of freedom for existing management, social tilts and asset control are in the works. What must be considered greatly is the three-pronged mission statement which maintains product, economic and social implications vis a vis the outstanding offers. Additionally, it is likely that management, ownership, and the social stakeholders of Ben & Jerry’s will all be affected differently in the proposals, according to the varying stances of the buyers versus B&J. I will proceed to outline the offers as they impact the financial needs of B&J, the current management and management structure, the social stakeholders, and the shareholders.

Dreyer’s offer of $31 per share is the least attractive of the buyout bids from a shareholder viewpoint. That being said, maintaining the management team at B&J would appeal to the board of directors very highly, and keeping management of a successful enterprise (albeit with low, but growing ROE and operating margins) intact would allow for seamless transition into Dreyer’s ownership. One downside from a product perspective is that Dreyer’s purchase of B&J would cannibalize some of its sales in the premium ice cream market currently held by Edy’s brand. Thus, some profits from the B&J purchase would not become realized until this is taken into account, and more would inevitably be expected of the management team than if they were to operate without a similarly co-owned competitor. Dreyer’s has the loosest restraints on...