Dive Brief:
- Lifeway Foods has turned down an acquisition offer from Danone on September 23, valuing the kefir maker at $283 million, or $25 per share. Danone, a significant shareholder in Lifeway, currently holds 23.4% of its common shares.
- In a statement, Lifeway stated that its board concluded that “Danone’s opportunistic proposal significantly undervalues Lifeway and is not in the best interest of the Company, its shareholders, or other stakeholders.”
- Lifeway announced the adoption of a limited-duration shareholder rights plan that would be activated if any entity, person, or group acquires beneficial ownership of 20% or more of the company’s outstanding shares. Shareholders would be granted the right to purchase one preferred share of Lifeway’s stock for each common share held. This defensive measure aims to make it more challenging and costly for a potential acquirer to take over the company.
Dive Insight:
The rejection of Danone’s takeover offer by Lifeway is a common tactic employed by target companies in the business world to attract higher bids or alternative suitors. With Danone already owning a significant portion of Lifeway’s shares, it is unlikely that another party will attempt to acquire the kefir manufacturer.
Danone did not provide any comments on the rejection. Lifeway reiterated its commitment to its strategic plan of expanding the reach of kefir to more households and venturing into new product categories. The company aims to capitalize on its recent financial success and create value for its shareholders.
In 2023, Lifeway reported record annual sales of $160 million, marking a 13% increase from the previous year. The Illinois-based company has achieved 19 consecutive quarters of year-over-year growth. The popularity of kefir among consumers seeking digestive health benefits, especially those with conditions like Crohn’s disease and IBS, has contributed to Lifeway’s success. The product is also recognized for its positive impacts on bone and heart health.