Summary:
- Danone, a dairy giant, has increased its offer to acquire the remaining shares of kefir products maker Lifeway Foods for approximately $307 million, or $27 per share. This offer comes after Danone’s initial proposal of $283 million, or $25 per share, which was made in September. Danone currently owns 23.3% of Lifeway’s common shares.
- In a letter to Lifeway CEO Julie Smolyansky, Danone expressed disappointment with the board’s initial response to their previous offer and emphasized that the increased price reflects the company’s potential.
- Lifeway has seen significant growth in consumer demand for healthier products, particularly its kefir and fermented probiotic products. The company recently reported net sales of $46.1 million for the quarter ended Sept. 30, marking the 20th consecutive quarter of year-over-year growth.
Insights:
Danone’s interest in acquiring Lifeway aligns with its goal of expanding its portfolio of healthier dairy products. However, negotiations have become more complex as Lifeway seeks a higher price following the rejection of Danone’s initial proposal.
While the revised offer represents an increase of $2 per share, Lifeway is carefully evaluating the proposal to determine the best course of action for the company and its stakeholders.
Given Danone’s long-standing investment in Lifeway, it is unlikely that another buyer will emerge. Danone believes that a merger with Lifeway could unlock the company’s full potential and is open to discussing the updated proposal and next steps.
The acquisition bid comes at a time of internal conflict within Lifeway, as CEO Julie Smolyansky’s family members have expressed support for Danone’s initial offer. The board is urged to consider the offer promptly to maximize value for shareholders, employees, and consumers.
Previously undervalued, Lifeway’s stock has seen a significant increase following calls for the company to explore a sale. Kanen Wealth Management’s assessment of Lifeway’s potential has contributed to the company’s stock growth.
Update: Lifeway has issued a statement regarding Danone’s new offer.