Major investor criticises Lifeway rights plan extension

Core Viewpoint - Lifeway Foods' decision to extend its shareholder rights plan has been criticized as a move to protect management rather than shareholders, with concerns about entrenchment and control over the company [1][2][4]. Group 1: Shareholder Rights Plan Extension - Lifeway's board approved a one-year extension of its shareholder rights plan to October 29, 2026, maintaining all other terms unchanged [1]. - The board cited the company's "highly concentrated share ownership" as a reason for the extension, noting that Edward Smolyansky and his mother own just over 25% of Lifeway, while Danone holds nearly 23% [4][5]. - The board expressed concerns about the potential for shareholders to gain control without compensating other shareholders fairly [5]. Group 2: Criticism and Management Control - Edward Smolyansky criticized the extension as a "shield for management," arguing it is a blatant example of management entrenchment [2][3]. - He suggested that the current board and management are overly concerned about losing control, effectively blocking any significant stake accumulation by investors like Danone [3]. - Tensions within the Smolyansky family are highlighted, as they previously attempted to replace the board to enhance accountability and shareholder value [6][7]. Group 3: Takeover Bids - Danone, a long-time investor in Lifeway, made a takeover bid of $25 per share in September 2024, later increasing it to $27 per share, both of which were rejected by Lifeway as undervaluing the business [6].