Lifeway Meals has maintained the shareholder settlement the corporate has with investor – and suitor – Danone is “invalid”.
The kefir maker, a takeover goal for Danone, responded to claims from the French large that it had breached an investor deal between the 2 corporations.
Late final month, Danone wrote to Lifeway claiming the US enterprise and its CEO, Julie Smolyansky, had violated an settlement courting again to the Activia maker’s funding within the firm.
Danone stated Lifeway’s resolution to award Smolyansky almost 300,000 shares broke the deal and warned the corporate it was getting ready litigation.
Nevertheless, Lifeway insists the settlement, which dates to 1999, is void beneath state regulation in Illinois, the place the group is predicated. “An settlement that’s invalid doesn’t develop into legitimate just because each events observe its phrases for a time frame, irrespective of how lengthy. The corporate intends to pursue all out there treatments to implement Illinois regulation and nullify the settlement,” Lifeway stated in an announcement yesterday (6 January).
In September, Danone, which already owned simply over 23% of Lifeway, proposed buying the remainder of the enterprise for $25 per share – a 59% premium over the inventory’s then-three-month quantity weighted common worth.
Lifeway rejected the supply on 5 November, arguing the bid undervalued the enterprise. Danone raised its supply to $27 per share however that was additionally rebuffed.
Nevertheless, later in November, Lifeway stated its board was “not opposed” to a possible sale of the corporate.
In Danone’s letter to the Lifeway board, deputy CEO Shane Grant stated the enterprise had “belatedly acknowledged that it couldn’t proceed to stave off value-maximising proposals and conceded that it could be keen to contemplate a sale of the corporate”. He stated: “Thus far, Danone has seen no convincing proof that that is the case.”
The award of shares to Smolyansky was a transfer to “destroy shareholder worth and ignore Danone’s long-established contractual rights”, Grant added.
“Having seen the heightened potentiality of a sale of the corporate, the board has seemingly greenlit a value-destroying gifting program for the CEO in blatant violation of the shareholder settlement.”
Lifeway continues to insist Danone’s provides for the enterprise “severely undervalues” the group.
Nevertheless, in its assertion yesterday, Lifeway stated its board “reiterated that it’s not against a sale at a worth that extra precisely displays the true worth of the corporate”.
“Given Danone’s unsolicited and opportunistic proposal to amass Lifeway, the corporate and its outdoors advisors are wanting on the relationship between the events and assessing find out how to finest defend the pursuits of the corporate and its shareholders.”
