Unilever PLC's (LSE:ULVR) decision to spin off Magnum has got the City talking.
The frozen treats arm, soon to be listed under the catchy acronym TMICC, will begin trading on 10 November, and Barclays reckons it could be worth around €20 to €22 a share, or about €10 billion in total.
The analysts put Magnum’s prospective enterprise value at €13.4–€14.1 billion, using an earnings multiple of nine to nine-and-a-half times expected 2026 profits before interest, tax, depreciation and amortisation.
That’s roughly in line with consumer staples peers once a 10% discount is applied to reflect the risks of striking out alone.
For context, Froneri, the Nestlé-backed ice cream maker, has trebled operating profit in five years, while Magnum’s has barely budged.
Barclays argues there’s no reason that gap can’t narrow once the brand is free from Unilever’s corporate freezer. It forecasts annual earnings growth of 7% in its central case, rising to 9% if all goes smoothly.
The new chief executive, Peter ter Kulve, is promising a leaner, faster business, with management incentives tied to personal shareholdings, “skin in the game”, as the analysts note approvingly.
Magnum aims to lift margins by 40–60 basis points a year, helped by cost savings and a push into “intelligent freezers” that use up to 30% less energy.
Unilever itself, meanwhile, should emerge a sleeker operation. Shedding a seasonal, capital-heavy division lifts group margins by more than a percentage point overnight and tilts the focus further towards premium beauty and wellbeing.
Chief executive Fernando Fernandez has made clear he wants to channel future spending into the US and India, the group’s two biggest growth engines.
Investors will get one Magnum share for every five Unilever shares they hold, with Unilever keeping a 19.9% stake for now. If the spin-off performs, that stake could prove a sweetener, though as ever in the consumer world, execution will be the real test.