Lifeway Foods resists Danone’s takeover attempt

MORTON GROVE, Ill. - Lifeway Foods, Inc. (NASDAQ: LWAY), a prominent supplier of kefir and probiotic products with a market capitalization of $310 million, is confronting what it describes as "predatory actions" by global food company Danone (EPA:DANO) (OTCQX: DANOY (OTC:DANOY)). In a recent development, Lifeway alleges that Danone is attempting a hostile takeover at a price that undervalues the company, as indicated in a Schedule 13D filing with the Securities and Exchange Commission. According to InvestingPro analysis, the company currently appears fairly valued based on its comprehensive Fair Value model.

Lifeway accuses Danone of exploiting its significant corporate influence to pressure the board and shareholders into an unfavorable transaction, rather than engaging in fair negotiations. The board is determined to maximize shareholder value and rejects being coerced into a deal that does not reflect Lifeway’s worth.

The dispute highlights a strained relationship that dates back to Danone’s investment in Lifeway in 1999. Lifeway contends that Danone has used the 1999 Stockholders’ Agreement, which Lifeway believes to be invalid, to gain an advantage at the expense of Lifeway’s shareholders. This includes denying market-level equity compensation to Lifeway executives for over two decades and hindering potential acquisitions that could enhance the company’s value.

Despite the tensions, Lifeway reports a record year for 2024 with significant increases in top-line revenue, net income, and EBITDA. Financial data from InvestingPro shows impressive performance metrics, including 18.3% revenue growth to $182 million and a strong return on equity of 21%. The company also cites a 17% increase in gross sales for the last week of February 2025 compared to the same period in 2024. InvestingPro analysis reveals 8 additional key insights about Lifeway’s financial health and growth potential, available to subscribers.

In response to the lawsuit referenced in Danone’s SEC filing, Lifeway intends to file a counterclaim and will vigorously defend against Danone’s allegations.

Lifeway Foods, recognized by Forbes as one of the Best Small Companies, is the category leader for kefir products in the United States. The company’s fermented dairy products are available in multiple countries, and it plans to continue its international expansion. InvestingPro data highlights the company’s strong financial position, with a healthy current ratio of 2.68 and minimal debt, supporting its growth initiatives. Detailed analysis of Lifeway’s expansion potential and comprehensive financial metrics are available in the Pro Research Report, part of the extensive coverage of over 1,400 US stocks on InvestingPro.

This press release contains forward-looking statements, which should not be relied upon as guarantees of future performance. These statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those projected.

The information in this article is based on a press release statement from Lifeway Foods, Inc.

In other recent news, Lifeway Foods has reported a strong financial performance, with 21 consecutive quarters of growth, culminating in double-digit year-over-year revenue growth for the third quarter of 2024. The company anticipates full-year 2024 net sales to reach between $185.0 million and $186.5 million, a significant rise from $160.1 million in 2023. Despite this robust performance, Lifeway Foods declined a buyout offer from Danone North America, asserting that the proposal undervalues the company. The Board of Directors, supported by independent financial and legal advisors, is open to a sale but only at a valuation that reflects the company’s true worth. Additionally, Lifeway Foods is taking legal action to address public misstatements made by Edward and Ludmila Smolyansky, as recorded in an SEC filing. The company remains focused on maintaining communication integrity and ensuring accurate information dissemination. These developments highlight Lifeway Foods’ commitment to its growth strategy and shareholder interests.

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