Since April 20, Blue Bell Creameries, the famous Texas-based ice cream maker, hadn’t sold a single product due to an ongoing investigation related to a listeria outbreak that reportedly contaminated its products. In the meantime, the company sacked more than 1,400 employees and recalled all product lines.
But Sid Bass, a 72-year-old billionaire from Fort Worth, Texas, announced yesterday that it would invest an undisclosed multi-million sum of money into the company. Mr. Bass’ portofolio is mainly based on Disney company, and oil and gas stocks.
Yet, investment analysts currently wonder whether the Texan’s move of not letting the famous Texan brand sink was driven by state pride, or pure opportunity. Mark Freeman, from the Westwood Holdings thinks that big shareholders like Mr. Bass and Warren Buffet put their financial interests first, and leave emotions last.
“A distressed situation very often can create opportunities. I’m sure he didn’t just throw money into it because it’s an iconic Texas brand,”
added Mr. Freeman.
Mr. Bass’ office declined to comment on the motives of the investment and said that the billionaire was on a business trip.
Blue Bell’s chief executive Paul Kruse announced that the capital influx would allow the company resume operations and provide again ice cream to its loyal fan base. Mr. Kruse didn’t disclose how large Mr. Bass’ share of the company’s stock currently was, neither whether the investor was also a fan of the brand.
The Kruse family who owns the brand said that all the company’s investors including Mr. Bass are committed to continue the 108-year-old family tradition of delivering the famous ice cream brand to consumers. A company’s spokeswoman welcomed the Texan’s involvement in the future of the brand.
Mr. Bass inherited a large fortune from Sid Richardson, an uncle who had a thriving oil and gas business. His fortune is now worth $1.7 billion and he features on position 1,118 on Forbes’ famous billionaire list. Before the financial crisis he featured on the Top 400 list and his fortune was estimated at $3 billion.
Although the company seems to slowly come back to life with a recently announced trial at an Alabama plant, it would still be under federal and state scrutiny over the listeria outbreak.
According to a research firm, the product recall could cost the company $130 million this year. But as sales will not resume until the investigation is over and there is also the need of some costly repairs, that sum may reach $180 million by the end of the fiscal year.
Image Source: Diane Gottsman