Smolyanskys call for Lifeway to establish committee to evaluate Danone’s offer

Edward and Ludmila Smolyansky, who together exercise voting control with respect to approximately 29.7% of the outstanding shares of common stock of Lifeway Foods (LWAY), called for Lifeway’s board of directors to take several actions, including immediately establishing an independent special committee to evaluate and negotiate a transaction with Danone (DANOY) or other potential buyers. This follows a proposal by Danone North America PBC to acquire all outstanding shares of Lifeway that Danone does not already own for $27 per share in cash. The Smolyanskys said, “Rather than negotiate with Danone in response to its generous proposal, Lifeway quickly rejected it outright. This is consistent with the prior statements by CEO Julie Smolyansky and Jason Burdeen, her spouse who also serves as the CEO’s chief of staff, that they would never allow a sale of Lifeway. As disclosed in Lifeway’s SEC filings, rather than explore a value-maximizing transaction, Lifeway is now threatening to file a lawsuit against Danone to invalidate a stockholders agreement that allows Danone to veto any stock grants to the CEO and gives Danone a right of first refusal over certain stock transfers by the other parties to the agreement. Lifeway claims that certain provisions of the stockholders agreement are impermissible under Illinois law, even though Lifeway has previously sought to enforce that very stockholders agreement on multiple occasions. The Founding Shareholders are calling for Lifeway’s board of directors to take the following actions: Establish an Independent Special Committee Authorized to Negotiate a Sale of the Company and Make Its Approval Subject to a Vote by Shareholders…Preclude Jason Burdeen from Any Involvement in Evaluating or Responding to Danone’s Proposal Given His Partiality, as Recently Recognized by a Federal Judge…Disclose Any Reports by Kroll…Agree to Allow the Dissemination of All Deposition Transcripts in the Two Lawsuits Lifeway Filed Against the Founding Shareholders.”