Lifeway Foods Defends Rejection of Danone Acquisition Offer in Face of Criticism
(UPDATED with Lifeway Foods' comments and data, 9:30a CT, Nov. 8, 2024)
The saga over the future of Lifeway Foods continued this week, with Lifeway’s board of directors rejecting the acquisition offer from Danone North America PBC earlier this week. Members of Lifeway’s founding family shared a statement encouraging the board to reconsider that move, while the company also shared a statement defending the decision.
On Nov. 6, Lifeway’s board of directors rejected Danone’s Sept. 23 proposal to acquire all the shares of Lifeway that it does not already own for $25.00 per share — a deal that amounted to approximately $283 million, according to reports. Danone North America has owned 23% of Lifeway for several years.
In a statement sent to Food Processing on Nov. 7, Edward and Ludmila Smolyansky, significant shareholders and members of the family that founded Lifeway, explained their support for the offer sent by Danone, calling the limited duration shareholder rights plan adopted instead a “poison pill.”
“For nearly four decades, we have fostered Lifeway’s growth with carefully attention to what is best for the company’s future. Today, we strongly support Danone’s offer, which represents a substantial premium over Lifeway’s recent share price and reflects their confidence in the growing U.S. kefir market — a category we helped build from the ground up.
As we approach one of most significant and closely watched earnings releases in Lifeway’s history, we remain optimistic about the company’s potential and believe that Danone’s proposal presents a unique opportunity to enhance value for all shareholders.
We encourage the Lifeway board to carefully and in good faith reconsider Danone’s offer and seize this opportunity to deliver lasting value to shareholders, employees, and consumers. The longer they wait, the more money they will leave on the table, to the detriment of all.”
A Lifeway Foods representative also sent a statement to Food Processing the morning of Nov. 8, in which the company stated:
“Lifeway Foods’ Board of Directors has rejected the unsolicited proposal by Danone because it has determined that it substantially undervalues Lifeway and is not in the best interests of the company and its shareholders. As our strong historical financial results indicate, we have had sustained momentum with runway for further growth ahead. The Board has also adopted a limited duration shareholder rights plan, effective immediately, which is intended to enable all shareholders to realize the full value of their investment in Lifeway. Lifeway remains focused on bringing kefir to more households, while also expanding into adjacent categories.”
The strong financial results the company refers to include 19 consecutive quarters of year-over-year topline growth; as well as revenue growth from $93.6 million to $160.1 million and gross profit growth of 91.6% from 2019 to 2023.
Over the past five years, the company adds, Lifeway's share price has increased more than 1,000%.
