Lifeway Foods shareholders continue consent solicitation battle

Edward and Ludmila Smolyansky, who control approximately 26% of Lifeway Foods Inc. (NASDAQ: LWAY) shares, provided an update on their consent solicitation process following the filing of a definitive consent statement with the Securities and Exchange Commission on July 2.

The Smolyanskys filed the consent statement seeking to remove Lifeway's current board of directors and elect seven new directors, including themselves. The company responded on July 3, stating the consent solicitation is legally deficient because it lacks adequate notice to shareholders and the board has not set a record date.

Edward Smolyansky said the board requested a record date and shareholder list in a letter dated June 17, which remains unfulfilled. The Smolyanskys are asking shareholders to sign and return white consent cards as described in their definitive consent statement.

The press release highlighted recent stock transactions by Jason Scher, the lead independent director and chairperson of the Audit and Corporate Governance Committee. According to Form 4 filings, Scher sold 24,566 of his 24,567 shares for nearly $600,000 at an average price of $24.23, retaining only one share.

The Smolyanskys questioned how Scher's sales align with the board's position that Danone's $27 per share offer "severely undervalues the Company." They also noted the sales appear to violate the company's director stock ownership policy, which requires directors to hold shares valued at 200% of their annual retainer.

Lifeway Foods has adopted a poison pill defense against Danone's acquisition offer and postponed its 2025 annual meeting. The Smolyanskys previously filed a preliminary proxy statement on April 16 relating to their intent to nominate directors at the annual meeting.

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