Lifeway Foods rejects Danone’s $283M ‘opportunistic’ takeover offer

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Dive Brief:

• Lifeway Foods rejected a Sept. 23 offer by Danone to acquire the kefir maker for about $283 million, or $25 a share. Danone, a long-time shareholder in Lifeway, currently owns 23.4% of its common shares.
• In a statement, Lifeway said its board determined that “Danone’s opportunistic proposal substantially undervalues Lifeway and is not in the best interests of the Company and its shareholders or other stakeholders.”
• Lifeway said its board adopted a limited-duration shareholder rights plan that will go into effect if an entity, person or group acquires beneficial ownership of 20% or more of the outstanding shares of the company’s stock. Shareholders would receive the right to purchase one preferred share of Lifeway’s stock for each outstanding share of common stock. A so-called position pill is meant to make it harder and more expensive for an acquirer to purchase a company. 

Dive Insight:

The rejection by Lifeway of Danone’s takeover offer is hardly a surprise, with target companies in the business world often doing just that with the hope that they can coax a higher bid or attract the interest of another bidder. With Danone owning nearly a quarter of Lifeway’s shares, it’s highly unlikely that another party will try to make a play for the kefir and fermented probiotic products manufacturer.

Danone did not respond to a request for comment. Lifeway added that it “remains focused on its strategic plan to bring kefir to more households while also expanding into adjacent categories. The Company plans to continue to build on its strong momentum, as evidenced by recent financial results, and creating shareholder value.” 

Lifeway reported record annual sales of $160 million in 2023, an increase of 13% from the prior year. The Illinois-based company has posted 19 consecutive quarters of year-over-year growth. Consumers have turned to kefir to regulate their digestion, particularly people afflicted with Crohn’s disease and IBS, according to Julie Smolyansky, Lifeway’s CEO. The product is also known to have benefits for bone and heart health.