Unilever’s Magnum Ice Cream Co. Trades at €7.8 Billion Value

Core Insights - Unilever's spinoff, The Magnum Ice Cream Co., debuted with a market valuation lower than analysts' expectations, aiming to enhance its performance as an independent entity [1][6]. Market Performance - Magnum shares opened at €12.20 ($14.22) in Amsterdam, later trading slightly above the technical reference price of €12.80, resulting in a market value of €7.9 billion [2]. - Early trading showed steady performance, indicating investor alignment with the lower-than-expected market capitalization [3]. Valuation and Investor Sentiment - Analysts noted that the valuation reflects a balance between forced selling due to index tracking mandates and future growth expectations [3]. - The reference price was set at €15, which was higher than the opening price, suggesting a strategy to attract medium-term growth investors while alleviating pressure from index-related selling [4]. Index Inclusion and Share Dynamics - Unlike Unilever, Magnum is not expected to be included in the UK's FTSE 100 or the Stoxx Europe 50 index, leading to an anticipated sale of about 30 million shares due to index changes [5]. - The company will have approximately 612.3 million shares issued [5]. Future Outlook - Analysts predict that a more stable trading price for Magnum will not be established until at least the following week, with expected prices ranging from €10 to €15.5 [6]. - The company, which includes brands like Ben & Jerry's and Cornetto, aims to leverage its independence to drive growth after being Unilever's least profitable division [7].