USA – Lifeway Foods has rejected a revised takeover bid from French dairy giant Danone, arguing that the US$307 million offer, or US$27 per share, fails to accurately reflect the value of the US-based kefir company.
This offer represents an increase from Danone’s initial proposal of US$283 million, or US$25 per share, which Lifeway also turned down in September.
Danone, which already owns a 23.3% stake in Lifeway, claimed that the new offer represents a 72% premium over Lifeway’s three-month volume-weighted average share price as of the day before Danone’s first proposal.
However, Lifeway’s management disagrees, stating that the bid does not align with the company’s growth trajectory and long-term potential.
In a statement, Lifeway emphasized that the offer was not in the best interests of its shareholders and other stakeholders. The company highlighted its recent achievements, including 20 consecutive quarters of growth, double-digit year-over-year revenue increases, and improved profit margins in the third quarter of 2024. Lifeway also reported record annual sales of $160 million in 2023, marking a 13% year-on-year increase.
Lifeway’s board expressed confidence in the company’s future, focusing on expanding kefir’s market reach and exploring new categories.
“We remain committed to building on our strong momentum and unlocking additional shareholder value,” the company said, asserting its plan to continue growing independently and maximizing the value of its business.
Lifeway’s product lineup includes not only kefir but also cheeses and a ProBugs line for children. These products are sold across several countries, including the US, Mexico, Ireland, South Africa, UAE, and France.
The company’s success in diversifying its offerings and expanding into international markets has contributed to its robust financial performance, which Lifeway is keen to build on.
Danone, known for its strong portfolio of probiotic-focused dairy products such as Activia and the low-sugar Too Good brand, has shown growing interest in better-for-you dairy options, including kefir, especially as consumer demand for immune-boosting and gut-health products surged during the COVID-19 pandemic.
Despite this, Lifeway believes its continued focus on growth and strategic expansion will create greater value for its stakeholders.
The proposed takeover comes amid internal leadership tensions at Lifeway. In August, the company’s largest investors, Edward and Ludmila Smolyansky, filed a consent statement seeking to replace the current board, including CEO Julie Smolyansky.
The Smolyanskys, who are also backing Danone’s bid, have argued that new leadership is needed to better align the company with shareholder interests.
In a statement supporting Danone’s offer, Edward and Ludmila Smolyansky said they viewed the bid as a significant opportunity for Lifeway’s shareholders, noting that the proposal represents a substantial premium over the company’s recent share price.
However, Lifeway’s board and management remain focused on maintaining control and building long-term value independent of the offer.
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