(Bloomberg) -- Bankers are working on raising debt financing of around €9 billion ($9.6 billion) for Unilever Plc’s ice cream business, in case it opts for a sale to private equity firms instead of a public listing.

Unilever kicked off initial discussions with buyout investors about a possible £15 billion ($19 billion) sale of the ice-cream business earlier this year, but has more recently said a spin-off is the most probable route. While an IPO is on track for the fourth quarter of next year, some private equity suitors are still holding out hope that the company will revisit a potential sale, according to people familiar with the matter.

In a bid to support this, bankers are working on debt financings of up to six times the approximate €1.5 billion earnings of a unit that owns brands such as Ben & Jerry’s and Magnum, said the people, asking not to be identified because the talks are private. Unilever declined to comment.

Given the potential size, bankers are attempting to tap into as much liquidity as possible and include both secured and unsecured debt in the form of leveraged loans and high-yield bonds, the people added. The money would be denominated in euros, dollars and sterling. 

Bankers are eager to underwrite leveraged buyouts and rake in the lucrative fees on offer, following a dearth of M&A activity in 2024. Buyout financing is one of the most profitable areas of investment banking and with interest rates finally on the way down, risk appetite is returning. 

Leveraged debt investors recently agreed a multi-billion euro and dollar refinancing for rival ice cream producer Froneri, a joint venture between PAI Partners and Nestle SA that includes well-known brands like Haagen-Dazs. The deal proved popular and was priced at tighter levels than anticipated.

Debt investors are also familiar with former Unilever units. Many are invested in the spreads business after the sale of Flora Food Group B.V. to KKR & Co. in 2017, as well as in tea following the sale of ekaterra to CVC Capital Partners in 2021.

The plan to separate Unilever’s ice cream business is one of various moves to streamline its portfolio since it fended off an unsolicited takeover bid from Kraft Heinz Co. in 2017.

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