Dairy giant Danone has increased its offer to acquire the remaining shares of kefir producer Lifeway Foods, proposing $307 million, or $27 per share. The revised bid, disclosed in a regulatory filing, comes after Lifeway’s board rejected an earlier $283 million offer made in September. Danone, which already owns 23.3% of Lifeway’s common shares, emphasized that the updated proposal “fully reflects the fundamental potential of the company.”
In a letter to Lifeway CEO Julie Smolyansky, Danone expressed disappointment with the board’s response to the initial offer, stating that the updated bid underscores its commitment to maximizing Lifeway’s value.
Lifeway has capitalized on growing consumer interest in health-focused products, with its probiotic-rich kefir beverages driving robust sales. The company recently reported a 13% year-over-year increase in quarterly net sales, reaching $46.1 million for the period ending September 30, marking its 20th consecutive quarter of growth.
Lifeway responded late Friday, saying it would “carefully review and evaluate the revised proposal” to determine the best course of action for its stakeholders. Despite the increase, it remains uncertain if the offer will meet the board’s expectations.
The acquisition bid unfolds amid internal tensions, with Lifeway CEO Julie Smolyansky at odds with her mother and brother, Ludmila and Edward Smolyansky. The pair publicly backed Danone’s initial proposal, urging the board to act in the shareholders’ best interests.
Last year, activist investor Kanen Wealth Management called for a Lifeway sale, citing undervaluation under the current leadership. Since then, Lifeway’s stock value has surged by 225%, reflecting investor confidence in the company’s trajectory.
For Danone, the acquisition aligns with its strategy to expand its portfolio of health-oriented dairy products. The company noted that a merger would free Lifeway from the constraints of operating as a small, publicly listed entity, providing the resources needed to unlock its full potential.
Danone’s next steps include engaging Lifeway’s board to finalize the terms of the proposal. Whether Lifeway will accept the revised offer or push for further negotiations remains to be seen.