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Danone North America PBC has sweetened its bid to acquire the remaining shares of Lifeway Foods Inc., increasing its offer from $25 per share to $27 per share, totaling approximately $306 million. The increased bid follows Lifeway’s rejection of Danone's earlier $283 million proposal, as outlined in a letter from Danone's CEO, Shane Grant, on Friday.

Danone Increases Lifeway Acquisition Offer : Details of the Updated Proposal

Danone, which currently holds a 23.3% stake in the Illinois-based fermented foods company, made its initial offer on September 23. However, Lifeway turned down the bid on November 5. According to a Friday securities filing, the revised all-cash offer reflects a 72% premium over the three-month volume-weighted average price of Lifeway's stock as of the last full trading day before the original offer.

In his letter, Grant expressed disappointment over Lifeway's initial rejection but reaffirmed Danone’s commitment to pursuing the acquisition. He argued that merging with Danone would unlock Lifeway’s full potential by providing additional resources and eliminating the constraints associated with being a publicly traded company of its size.

Lifeway's Defensive Strategy

Lifeway has taken steps to protect itself against Danone’s takeover attempts by adopting a limited-duration stockholder rights plan, commonly known as a "poison pill." This strategy involves issuing preferred share purchase rights to existing shareholders, which become exercisable if Danone or any other entity tries to increase its stake beyond a certain threshold. The goal is to prevent any hostile acquisition by making it significantly more expensive for Danone to gain control.

Market Reaction and Potential Next Steps

Following the news of Danone's updated offer, Lifeway's stock price surged more than 6% on Friday, reaching $23.78 per share. Grant emphasized that Danone is eager to move forward with the acquisition and expressed confidence in finalizing a deal within three weeks if granted "data room" access to conduct due diligence.

The updated bid marks Danone’s continued interest in expanding its footprint in the health-focused fermented foods sector, which includes Lifeway’s popular kefir products.

Danone Increases Lifeway Acquisition Offer : Legal and Corporate Representation

The securities filing disclosed that key figures involved from Danone include Shane Grant, Christine Flamand (General Counsel, Danone SA), Samantha Loh (General Counsel, M&A, Danone SA), and Nancy Dowling (General Secretary, Danone North America). Danone is being advised by Joshua R. Cammaker, a corporate partner at Wachtell, Lipton, Rosen & Katz.