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CHICAGO - Edward and Ludmila Smolyansky, who control approximately 26% of Lifeway Foods, Inc. (NASDAQ:LWAY) voting shares, reported today that their consent solicitation process is gaining momentum following their July 2 filing with the Securities and Exchange Commission. The company, currently valued at $384 million, has demonstrated strong financial performance with a remarkable 113% return over the past year. According to InvestingPro analysis, Lifeway maintains excellent financial health with strong balance sheet metrics.
The Smolyanskys are seeking shareholder support to remove the current board of directors amid disagreements over the company’s direction and a potential acquisition offer from Danone at $27 per share. Notably, analysts have set a consensus target price of $30 for Lifeway, suggesting potential upside from current levels around $25.11.
The shareholders’ efforts come after Lifeway Foods claimed on July 3 that the consent solicitation was legally deficient. The Smolyanskys countered that they had formally requested a record date and shareholder list on June 17, which they say remains unfulfilled. InvestingPro data shows the company trades at relatively high multiples with a P/E ratio of 37, while maintaining strong operational metrics and zero debt, factors that could influence valuation discussions.
The Smolyanskys also highlighted concerns about recent stock sales by Jason Scher, Lifeway’s lead independent director, who reportedly sold 24,566 of his 24,567 shares at an average price of $24.23, netting approximately $600,000. They questioned how these sales align with the board’s position that Danone’s offer "severely undervalues the Company."
"Director Scher selling nearly all of his shares last week is a very troubling indicator about what the Board plans for the Company," Edward Smolyansky stated, according to the press release.
The dissident shareholders are proposing to elect seven new directors: Ludmila Smolyansky, Edward Smolyansky, Richard Beleutz, Cindy Curry, Michael Leydervuder, George Sent, and Robert Whalen.
Lifeway Foods has postponed its 2025 annual meeting, according to the shareholders’ statement. The company has also implemented a poison pill defense mechanism in response to Danone’s acquisition offer.
The Smolyanskys are urging fellow shareholders to support their efforts by returning WHITE consent cards as detailed in their consent statement filed with the SEC.
In other recent news, Lifeway Foods reported a 10.7% increase in net sales for the first two months of the second quarter, reaching $37.6 million compared to the previous year. The company projects second-quarter net sales to be between $52 million and $56 million, reflecting continued growth in consumer interest for probiotic-rich foods. Lifeway’s first-quarter 2025 earnings per share met analysts’ expectations at $0.23, although revenue fell short at $46.09 million against a forecast of $48 million. Despite this revenue miss, Lifeway Foods remains optimistic about its growth trajectory, with projections for fiscal years 2025 and 2026 estimating revenues of $210.5 million and $232 million, respectively. The company also announced the expansion of its product distribution, including new lines of kefir and cheese products available at major retailers nationwide. Lifeway Foods is urging shareholders to disregard a consent solicitation by Edward and Ludmila Smolyansky, which the company claims violates Illinois law and its organizational documents. CEO Julie Smolyansky highlighted the company’s robust position and ongoing efforts to expand product offerings and market reach. The company continues to focus on innovation and new market opportunities to sustain its growth in the competitive health and wellness sector.
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