Lifeway Foods has rejected Danone‘s latest takeover offer, arguing the bid “substantially undervalues” the US kefir company.
Last week, the French dairy giant raised its offer to buy Lifeway to approximately $307m, or $27 per share, after having its initial September proposal of $283m, or $25 per share, turned down.
Danone, which already owns 23.3% of Lifeway, had said the new offer represents a 72% premium over the three-month volume-weighted average price of Lifeway’s shares as of the last trading day before the Activia maker’s initial proposal on 23 September.
Just Food has approached the Activia maker to comment on Lifeway’s decision to rebuff its latest offer.
In a statement, Lifeway said the new bid “is not in the best interests of the company and its shareholders or other stakeholders”.
Lifeway said it remains “focused” on its plans to expand kefir’s reach to more households while also venturing into “adjacent categories.”
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By GlobalData
In rejecting Danone’s offer, Lifeway pointed to its recent performance, including 20 consecutive quarters of growth, double-digit year-over-year revenue increases, and improved profit margins in the third quarter of 2024.
Lifeway reported record annual sales of $160m in 2023, an increase of 13% year-on-year.
“The company plans to continue to build on its strong momentum to unlock additional shareholder value. The board and management are committed to acting in the best interests of all shareholders and ensuring that they are able to realise the full potential value of their investment,” Lifeway’s statement read.
Besides kefir, Lifeway offers cheeses and a ProBugs line for children, with products available in the US, Mexico, Ireland, South Africa, UAE, and France.
Danone’s interest in better-for-you dairy products is well established with a yogurt portfolio that includes probiotic-focused Activia and the low-sugar Too Good brand.
The potential of kefir has been evident ever since the Covid-19 pandemic super-charged consumers’ interest in products linked to immunity and gut health.
Danone’s interest in acquiring Lifeway comes amid a long-running family dispute over control and leadership of the company.
In August, Edward and Ludmila Smolyansky, Lifeway’s largest investors, filed a consent statement to unseat the company’s current board of directors, including CEO Julie Smolyansky.
Edward and Ludmila – the mother and brother of CEO Julie respectively – said at the time they were trying to bring in leadership “committed to revitalising the company with a strategic vision aligned with the best interests of its shareholders”.
They have backed both of Danone’s bids. In a statement to Just Food on Monday, Edward and Ludmila said they “strongly” supported Danone’s second takeover offer as it “represents a substantial premium over Lifeway’s recent share price”.
