1. What decision does Morgan face?

2. How did Ben & Jerry’s become a takeover target? Hasn’t Ben & Jerry’s been successful in fulfilling its mission statement? Would you support a takeover?

3. What evidence is there that investors are dissatisfied?

4. Who ultimately controls the assets of Ben & Jerry’s? In general, how are assets allocated in a free-market system?

5. What is the impact of the asset-control devices used by management and the state of Vermont? Do you support the use of such control restrictions?

6. Could Ben & Jerry’s get straight A’s?

7. Should Morgan support a takeover offer?

This case examines issues of asset control for Ben & Jerry’s Homemade, Inc., in light of the outstanding takeover offers by Chartwell Investments, Dreyer’s Grand, Unilever, and Meadowbrook Lane Capital in January 2000. The case provides a unique opportunity to discuss fundamental firm objectives and the implications of poor financial performance as it reviews the development of Ben & Jerry’s strong social consciousness and the takeover defense mechanisms that maintain management’s control of company assets. Taking the role of an outside board member, students may review management’s performance, estimate the economic cost of current management practice, and evaluate the implications of takeover defense strategies. Ultimately, students must take a position on whether the board should defend the agenda of the current management team or accept one of the takeover offers and support a shift toward a more traditional orientation. 

The case provides opportunities for the instructor to develop any of the following teaching objectives: 

• Establish the importance of financial performance for a firm in a public capital market.
• Stimulate an appreciation for the tension regarding asset control among corporate stakeholders.
• Evaluate the role of corporate takeovers and the merits of takeover defenses.
• Introduce corporate valuation using investor multiple measures.