This audio is generated automatically. Please let me know if you have any comments.
Diving overview:
- Lifeway Foods on September 23 rejected Danone’s offer to acquire the kefir maker for about $283 million, or $25 per share. Danone, a longtime Lifeway shareholder, currently owns 23.4% of the company’s common stock.
- LifeWay said in a statement that its board of directors decided that “Danone’s opportunistic offer significantly underestimates LifeWay and is not in the best interests of the company, its shareholders and other stakeholders.”
- LifeWay said its board of directors has adopted a limited-term shareholder rights plan that will take effect if a company, individual or group acquires beneficial ownership of more than 20% of the company’s stock. Shareholders will receive the right to purchase one preferred share of Lifeway stock for each share of common stock outstanding. The so-called Position Pill is meant to make it more difficult and more expensive for acquirers to buy a company.
Dive Insights:
It’s no surprise that Lifeway rejected Danone’s acquisition offer. Target companies in the business world often do so in the hope of attracting higher bids or attracting the attention of other bidders. Since Danone owns nearly a quarter of Lifeway stock, it is unlikely that another company will take over the maker of kefir and fermented probiotic products.
Danone did not respond to a request for comment. “We remain focused on our strategic plan to bring kefir to more households while expanding into adjacent categories,” Lifeway said. “The company plans to continue creating shareholder value based on its strong momentum, as evidenced by its recent financial results.”
LifeWay reported record annual revenue of $160 million in 2023, up 13% from the previous year. The Illinois-based company has recorded 19 consecutive quarters of year-over-year growth. Consumers, especially those suffering from Crohn’s disease and IBS, are turning to kefir to regulate digestion, according to Julie Smolyansky, CEO of Lifeway. This product is also known to benefit bone and heart health.
