FOR RELEASE: IMMEDIATE Jan. 26, 2000
CONTACT:
Megan Galbraith
(518) 276-6050
[email protected]
"Death Knell" for Ben & Jerry's if Acquired by Multinational, says Rensselaer Professor
TROY, N.Y. - If Ben & Jerry's is acquired by a major multinational corporation, it spells "death for the company as it stands," according to Phillip Phan, an internationally known expert on corporate succession, and mergers and acquisitions at Rensselaer Polytechnic Institute.
"If Ben & Jerry's is acquired it will mean the death of that company as it stands," Phan says. "Ben & Jerry's was initially a grand experiment. The model of a company where profits are secondary to social responsibility just doesn't work. Corporations are the only device society has to effectively create wealth. Once you move away from the profit-motivated goal, you run into problems."
"Given the constellation of acquirers, it's very difficult for companies like Ben & Jerry's to exist individually," Phan says. "It's impossible nowadays to run a company without expecting some type of acquisition. Within this global environment, sometimes staying small is just not an option."
"The moment you become a publicly traded company, you have a moral obligation to make a decent return for your investors," Phan says.
"If you look at the bid price for the merger, it's about $30. Ben & Jerry's was trading at $21 a share which represents about 50 percent premium on the value of the company--that means 50 percent of its value is not being created by this company. If I was an investor I would seriously look to see if there is a better place to put my money," Phan says.
Phan is the Bruggeman Professor of Entrepreneurship at Rensselaer's Lally School of Management and Technology. He is a consultant to the World Bank and the Organization for Economic Cooperation and Development on corporate governance best practice initiatives, and has been a consultant with Fortune 500 firms and their Asian equivalents.
Phan's book "Taking Back the Boardroom: Better Directing for the New Millennium," will be published by McGraw Hill in February.
Contact:
Phillip Phan
(518) 276-2319 (w)/ [email protected] / (518) 235-0077 (h) or cell phone (518) 506-8500
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