Danone has signed an NDA with Lifeway Foods to allow the French giant to weigh up whether to make another bid for the US kefir business.
Last year, Lifeway turned down two takeover offers from Danone, one of the company’s largest shareholders.
Relations between the two companies since then have been less than smooth, with Danone launching a lawsuit claiming Lifeway breached a shareholder agreement. Lifeway has said Danone’s offers amount to a “hostile takeover”.
Amid the tension between Danone and Lifeway, a long-running family feud has festered at the US firm between chair and CEO Julie Smolyansky, and her mother and brother, Ludmila and Edward Smolyansky, the company’s largest shareholders.
In an SEC filing on 1 August, it emerged “representatives” of Danone and Lifeway started talks to “reset” the relationship and hold discussions over a “potential acquisition”.
The NDA was signed on 1 August “in order to facilitate Danone's further review of a potential acquisition transaction”, the SEC filing read.
The terms of the NDA “restrict the ability of Danone” to publicly make further acquisition proposals, attempt to remove anyone from Lifeway’s board or participate in any consent solicitation not recommended by the US company.
That includes the pending consent solicitation of Edward Smolyansky to replace the entire Lifeway board.
Last month, Edward and Ludmila, who own around 23.2% of Lifeway’s shares, said they had filed a “definitive consent statement” to the SEC to overhaul Lifeway’s board, including replacing CEO Julie, with new nominees “focused on restoring accountability, transparency and long-term shareholder value”. Lifeway called the move “legally deficient”.
The NDA terms expire on a “standstill expiration date” of 15 September – although it can be extended by a week if the companies are in “good faith discussions”.
The filing added: “If a definitive acquisition agreement has not been executed by the standstill expiration date, Danone presently intends to consent with respect to all of the shares of common stock it owns in favour of Edward Smolyansky's proposals set forth in his pending consent solicitation statement to replace the entire Lifeway board of directors.”
Danone holds around 22.7% of Lifeway.
