Lifeway Foods rejects Danone’s “opportunistic” takeover bid for US$25 a share

Lifeway Foods has rejected Danone’s proposal to acquire the US-based supplier of kefir and fermented probiotic products, which was made in September this year. 

The Lifeway board of directors decided that the dairy multinational’s “opportunistic offer substantially undervalues” the company and is not in the firm’s or its shareholders’ best interest after consulting with independent financial and legal advisers.

Danone offered to buy Lifeway for US$25 a share in cash, seeking to acquire all outstanding shares of the company’s common stock it does not already own. Other financial details of the transaction were kept private.

The French dairy giant has been a long-time shareholder of the health food player. According to a Schedule 13D amendment filed with the US Securities and Exchange Commission, Danone beneficially owns approximately 23.4% of Lifeway’s outstanding common stock.

Protecting stakeholder interests

Additionally, Lifeway has adopted a limited-duration shareholder rights plan, which can reduce the likelihood of Danone gaining control of the company through open market accumulation. With this plan, the company aims to let its shareholders realize the total value of their investment.

Lifeway notes that the rights plan does not limit the board’s consideration of acquisition offers from interested buyers. The company “remains focused on its strategic plan to bring kefir to more households while expanding into adjacent categories.”

Last month, the probiotic player added ten new flavors to its eight-ounce on-the-go organic kefir line. The range responds to the growing consumer trend for lactose-free dairy products.

Meanwhile, Danone is on track to withdraw the Nutri-Score label from its dairy and plant-based drinkable product packaging in Europe, a move that experts have criticized.

The French multinational states that the action is in response to an amended algorithm last year that places all “potable” or drinkable products under the umbrella of beverages.