Tuesday, September 24, 2024
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
The Proposal. In a move long awaited by many investors, yesterday after the market closed Danone North America proposed to acquire Lifeway for $25/sh in cash, valuing the entire Company at approximately $380 million. Although the proposal is non-binding, Danone seeks to engage in discussions with the Board with a view to signing a definitive agreement rapidly. LWAY shares reacted positively, trading up nearly 16% to $24.91 on the news.
Why Now? Danone has been a significant Lifeway shareholder since 1999 and currently owns 23.4% of the outstanding equity. According to the letter sent to management, Danone’s 2025-28 Renew strategy has a strong focus on gut health, “which is driving our interest in considering the benefits of a potential combination with Lifeway.” The probiotics in kefir may help support a healthy gut.
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