Lifeway Foods, a US-based supplier of kefir and probiotic products, revealed that its board has rejected Danone North America’s acquisition offer.
Through a proposal made in late September 2024, Danone sought to buy all outstanding shares of the Nasdaq-listed Lifeway Foods that it does not already own, for $25 per share.
Lifeway Foods, which is based in Illinois, said that after careful review with independent financial and legal advisers, its board determined that the offer significantly undervalues the company.
The firm’s board concluded that the proposal was not in the best interests of the probiotic maker, its shareholders, or stakeholders.
In response, and given Danone’s substantial ownership, the board has adopted a limited duration shareholder rights plan, with immediate effect, said Lifeway Foods.
The board adopted the rights plan to prevent the France-based Danone from gaining control of Lifeway Foods through open market purchases or other means, without offering shareholders a fair control premium.
According to Lifeway Foods, the plan ensures the board has sufficient time to make informed decisions that serve the best interests of all shareholders and stakeholders.
Under the rights plan, the kefir and probiotic products supplier will issue one preferred share purchase right for each outstanding share of common stock to shareholders of record as of 18 November 2024.
Initially, these rights will not be exercisable and will trade with Lifeway Foods’ common stock.
Lifeway Foods stated: “The Rights Plan does not deter any offer to acquire the Company from any party, nor does it preclude Lifeway’s Board from considering an offer that is fair and otherwise in the best interests of the Company’s shareholders.”
The company said that it remains focused on expanding kefir to more households and entering new categories.
The probiotic maker aims to build on its recent financial momentum and create long-term shareholder value. The board and management plan to act in the best interests of shareholders and maximise the value of their investments, Lifeway Foods said.
Evercore is acting as the financial adviser, while Sidley Austin is providing legal counsel to Lifeway Foods.
