Lifeway rejects Danone’s second takeover offer

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Lifeway Foods rejected an increased offer from Danone, with the kefir products maker saying the latest proposal “substantially undervalues” its business. 

Dairy giant Danone last week increased its offer to buy the remaining stock it doesn’t already own in Lifeway to about $307 million, or $27 a share, up from an earlier $283 million, or $25 a share, proposal in September. Danone currently owns 23.3% of Lifeway’s common shares.

“The Company plans to continue to build on its strong momentum to unlock additional shareholder value,” Lifeway said in a statement. “The Board and management are committed to acting in the best interests of all shareholders and ensuring that they are able to realize the full potential value of their investment.”

Lifeway noted that it “remains focused on executing its strategic plan to bring kefir to more households while also expanding into adjacent categories. Earlier on Wednesday, Lifeway introduced its latest functional beverage innovation: Probiotic Smoothie + Collagen made with kefir cultures.

In rebuffing Danone, Lifeway noted its recent success. The Illinois-based company highlighted that it has posted 20 consecutive quarters of growth and posted a double-digit year-over-year revenue increase.

Lifeway, a major beneficiary of increasing consumer demand for healthier products would complement Danone’s portfolio of better-for-you offerings. Danone owns brands such as probiotic-focused Activia and low-sugar Too Good yogurts.

Danone declined to comment on Lifeway’s rejection of its second proposal.

In a letter sent to Lifeway last week, Danone said that the $27 offer “represents a compelling proposition to [its] shareholders and reflects the fundamental potential of the Company.” It also pointed out that a purchase would remove expenses tied to being a public company and unlock value for Lifeway by increasing innovation, distribution and marketing support.