Lifeway Foods, a prominent Illinois-based dairy company, has rejected an unsolicited takeover bid from Danone North America, calling the offer undervalued. The company has implemented a “poison pill” defense strategy to protect shareholders and prevent Danone from acquiring a controlling stake.
Lifeway Foods, a leading Illinois-based dairy producer specialising in kefir and probiotic dairy products, has firmly rejected a takeover bid from French multinational Danone North America PBC. The offer, which valued Lifeway at $25 per share, was deemed “undervalued” by the company’s board, who called it not in the best interests of shareholders.
Danone, which already holds a 23.4% minority stake in Lifeway, proposed the acquisition of the remaining shares at the same price. In response, Lifeway’s board adopted a shareholder rights plan, commonly known as a “poison pill,” to protect against the low-premium bid. This defensive measure, effective immediately, will limit Danone’s ability to acquire a controlling stake without paying a premium.
According to Lifeway’s filing with the U.S. Securities and Exchange Commission (SEC), the board, after consulting with independent advisors, rejected the offer as “opportunistic” and significantly below the company’s intrinsic value.
Under the new rights plan, Lifeway will issue one preferred share purchase right for every common share to shareholders of record as of November 18, 2024. This plan is designed to provide the company with more time to evaluate the situation and safeguard the interests of all stakeholders. Following the announcement, Lifeway’s stock saw a modest rise of 0.9%, reflecting positive market sentiment.
Lifeway Foods is committed to ensuring that its shareholders realize the full value of their investment, the company stated, as it continues to pursue long-term growth and profitability.
