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Lifeway Foods has rejected Danone’s increased offer, with the kefir products maker saying the latest offer “significantly undervalues” its business.
Last week, dairy giant Danone increased its offer to buy the remaining shares it does not already own in LifeWay to about $307 million, or $27 a share, from its September offer of $283 million, or $25 a share. . Danone currently owns 23.3% of Lifeway’s common stock.
“The company plans to continue building on its strong momentum to create additional shareholder value,” LifeWay said in a statement. “The board and management are committed to acting in the best interests of all shareholders and realizing the full potential value of our investments.”
“We remain focused on executing our strategic plan to bring kefir to more households while expanding into adjacent categories,” Lifeway said. On Wednesday morning, Lifeway introduced its latest functional beverage innovation: Probiotic Smoothie + Collagen made with kefir cultures.
In rejecting Danone, Lifeway cited its recent success. The Illinois-based company highlighted its 20th consecutive quarter of growth and double-digit year-over-year sales growth.
Lifeway, a key beneficiary of growing consumer demand for healthier products, will complement Danone’s portfolio of better-for-you products. Danone owns brands such as probiotic-focused Activia and low-sugar Too Good yogurt.
Danone declined to comment on Lifeway’s rejection of its second offer.
In a letter to Lifeway last week, Danone said the $27 offer “represents a compelling proposition for shareholders and reflects the company’s fundamental potential.” He also pointed out that the purchase will unlock Lifeway’s value by eliminating the costs of becoming a public company and increasing innovation, distribution and marketing support.
