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CHICAGO - Lifeway Foods, Inc. (NASDAQ:LWAY) shareholders Edward and Ludmila Smolyansky, who control approximately 26% of outstanding shares, have criticized the company's decision to extend its Shareholder Rights Agreement without shareholder approval. The kefir producer, currently valued at $383 million with a price-to-earnings ratio of 35.8, maintains a strong financial position according to InvestingPro data, which rates the company's overall financial health as "GREAT."
On October 29, Lifeway's board approved a one-year extension of its Rights Plan to October 29, 2026, just before a scheduled board refreshment and leadership change deadline. The company also amended its bylaws to set the number of directors between five and ten.
Edward Smolyansky called the extension "a power grab that shields management and already entrenched directors at the expense of ordinary shareholders," according to a press release statement. The Smolyanskys argue the board should put the plan to a shareholder vote at the upcoming Annual Meeting.
The extension comes amid concentrated ownership by Danone SA, which holds approximately 23% of Lifeway's shares. The Smolyanskys have called on the company to rescind the amendment, disclose the board vote details, commit to shareholder votes on future renewals, and honor board refreshment promises.
The rights plan extension followed an October 17 letter from Edward Smolyansky notifying the company of his intent to nominate a candidate for the board and propose establishing a new committee of independent directors to evaluate executive management performance and strategic alternatives.
Lifeway Foods is scheduled to announce its third quarter results on November 12.
In other recent news, Lifeway Foods reported an estimated net sales growth of 21% to 24% for the third quarter of 2025, with sales expected to be between $55.8 million and $57.0 million. This increase is attributed to strong consumer demand for its kefir and farmer cheese product lines. Additionally, Lifeway Foods announced a strategic collaboration with Joe & The Juice to launch a limited-edition smoothie featuring its probiotic kefir, available at all Joe & The Juice U.S. locations. The company also extended its Shareholder Rights Agreement, commonly known as a "poison pill," by one year, now set to expire on October 29, 2026. Lifeway Foods has scheduled its 2025 annual shareholder meeting for December 16, with a deadline of October 20, 2025, for shareholder proposals. In board-related news, Jody Levy has resigned from the board of directors, with the company stating that the resignation was not due to any disagreements.
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