As an advisor to Reynolds, I would point out that in terms of operations, there is nothing special about Eskimo Pie, but the company still receives the benefit of being the first ice cream novelty on the scene and the brand value that flows from that fact. Going solo may grant the firm complete control over than brand, but operationally it does not grant the firm national license and corresponding economies of scale.

The Nestle offer is based upon the opportunity for that company to earn synergies with respect the offering -- combining the strength of the Eskimo Pie brand with the global marketing clout of Nestle. As a standalone company, Eskimo Pie still holds significant value, but not nearly as much values as if it was a standalone operation.

As a standalone operation, Eskimo Pie earns $0.76 per share, which taken on time equals to $9.50, which when multiplied...
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