Lifeway Foods Open to Sale Despite Rejecting Danone Offers
Source: DairyNews.today
U.S. kefir maker Lifeway Foods has indicated it remains open to a potential sale, even as it rejected two acquisition proposals from French dairy giant Danone, which holds a 23.3% stake in the company.
Danone’s most recent bid, submitted on November 15, offered $27 per share, valuing Lifeway at approximately $307 million. This followed an earlier offer of $25 per share in September. Both proposals were turned down, with Lifeway’s board arguing the offers “substantially undervalue” the company.
Despite rejecting the bids, Lifeway said in a statement on November 26 that its board is “not opposed to the sale of the company at any price.”
Valuation Dispute
Danone's latest proposal represents a 72% premium over Lifeway’s three-month volume-weighted average share price as of September 23. However, Lifeway believes its growth trajectory offers shareholders greater value than Danone’s bid.
The kefir producer has reported 20 consecutive fiscal quarters of year-over-year revenue growth, achieving record annual sales of $160 million in 2023, a 13% increase from the previous year. Lifeway forecasts adjusted EBITDA growth from $22 million in 2023 to $45–50 million by 2027.
Lifeway’s board noted that Danone’s offer implies an EBITDA multiple of just 7.5x to 8.5x based on 2027 projections, without accounting for potential synergies or operational efficiencies a strategic acquirer like Danone could realize.
Internal Disputes and Stakeholder Dynamics
Danone’s interest comes against the backdrop of a protracted family dispute over Lifeway’s leadership and direction. Edward and Ludmila Smolyansky, the company’s largest shareholders and relatives of CEO Julie Smolyansky, have supported both of Danone’s proposals.
In August, Edward and Ludmila sought to replace the current board, including Julie, citing the need for a strategic vision aligned with shareholder interests. This week, they renewed calls for an independent special committee to assess and negotiate Danone’s latest offer.
The Smolyanskys accused Julie of prioritizing the preservation of her family’s legacy over shareholder value. Lifeway was founded in 1986 by the late Michael Smolyansky, Julie and Edward’s father.
Strategic Outlook
Lifeway's board remains committed to its standalone growth strategy, emphasizing its potential to deliver superior returns compared to the Danone bids. “We believe in our ability to drive long-term value for our shareholders,” the board stated.
Danone has not commented publicly on the rejection of its latest offer but continues to express interest in expanding its stake in Lifeway as part of its broader strategy in the health-focused dairy segment.
Despite rejecting the bids, Lifeway said in a statement on November 26 that its board is “not opposed to the sale of the company at any price.”
Valuation Dispute
Danone's latest proposal represents a 72% premium over Lifeway’s three-month volume-weighted average share price as of September 23. However, Lifeway believes its growth trajectory offers shareholders greater value than Danone’s bid.
The kefir producer has reported 20 consecutive fiscal quarters of year-over-year revenue growth, achieving record annual sales of $160 million in 2023, a 13% increase from the previous year. Lifeway forecasts adjusted EBITDA growth from $22 million in 2023 to $45–50 million by 2027.
Lifeway’s board noted that Danone’s offer implies an EBITDA multiple of just 7.5x to 8.5x based on 2027 projections, without accounting for potential synergies or operational efficiencies a strategic acquirer like Danone could realize.
Internal Disputes and Stakeholder Dynamics
Danone’s interest comes against the backdrop of a protracted family dispute over Lifeway’s leadership and direction. Edward and Ludmila Smolyansky, the company’s largest shareholders and relatives of CEO Julie Smolyansky, have supported both of Danone’s proposals.
In August, Edward and Ludmila sought to replace the current board, including Julie, citing the need for a strategic vision aligned with shareholder interests. This week, they renewed calls for an independent special committee to assess and negotiate Danone’s latest offer.
The Smolyanskys accused Julie of prioritizing the preservation of her family’s legacy over shareholder value. Lifeway was founded in 1986 by the late Michael Smolyansky, Julie and Edward’s father.
Strategic Outlook
Lifeway's board remains committed to its standalone growth strategy, emphasizing its potential to deliver superior returns compared to the Danone bids. “We believe in our ability to drive long-term value for our shareholders,” the board stated.
Danone has not commented publicly on the rejection of its latest offer but continues to express interest in expanding its stake in Lifeway as part of its broader strategy in the health-focused dairy segment.
