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Eskimo Pie Up For Sale

September 9, 1999

RICHMOND, Va. (AP) _ Eskimo Pie will be sold in whole or in parts, company executives told shareholders at the dessert maker’s annual meeting Wednesday.

Eskimo Pie previously had resisted a bid by its largest shareholder, Canada’s Yogen Fruz World Wide Inc., to replace the board of directors with one willing to sell the company.

Last week, however Eskimo Pie’s board relented and agreed that shareholders wanted the company sold rather than restructured.

Shareholders reaffirmed the changed mandate of the existing board to sell the company, re-electing it Wednesday over an opposition slate put forth by Yogen Fruz.

``We’ve got pretty much a mandate from our shareholders to go ahead and sell this company either in whole or in part,″ Eskimo Pie president David Kewer said.

Kewer said the Richmond-based company, which sells Eskimo Pie chocolate bars, Oreo Big Stuff and Smart Ones, soon will begin looking for buyers.

Toronto-based Yogen Fruz, which owns a 17 percent stake in Eskimo Pie, has made several offers to buy the company since November, but has not been successful.

Yogen Fruz operates about 3,500 frozen-yogurt outlets and recently entered the retail dessert market.

Yogen Fruz president Michael Serruya has accused Eskimo Pie of neglecting shareholders’ interests by refusing to sell off the company. He said Eskimo Pie’s parts were more valuable than the whole.

Eskimo Pie contended Yogen Fruz was merely trying to recoup its investment, having seen the price of Eskimo Pie stock it bought at $13 per share drift down to around $10.

Shares of Eskimo Pie rose 8 percent on the news of the company’s planned sale, moving up 81 3/4 cents to $10.75 in trading Wednesday on the Nasdaq Stock Market.

Kewer had hoped to keep the company together with several new concoctions and a restructuring plan using money from the recent $9.5 million sale of its flavorings division. But shareholders, some of whom bought the stock for as much as $17 a share after the company’s initial public offering in 1992, believed it was time to cut their losses.

``They believed in the growth and restructuring plan, but they did not want to wait around for the time it would take to happen,″ Kewer said.

Eskimo Pie introduced its most famous product and namesake, an ice cream bar on a stick and covered with chocolate, in 1934. The company had $63.5 million in sales in 1998 but has been facing tougher and tougher competition from large industry competitors such as Nestle and Unilever.