Lifeway Foods shareholder Edward Smolyansky has launched an official campaign to replace the company’s board of directors.
Edward, the brother of Lifeway’s CEO Julie, owns 4,163,141 shares of common stock in the US-based kefir maker alongside their mother, Ludmila.
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He has filed a notice to elect new directors at its next annual meeting.
“Lifeway Foods has reached an inflection point,” a statement issued yesterday (17 March) on behalf of Edward and Ludmila read.
“The board’s continued deference to the CEO has raised serious governance concerns, and it must now demonstrate in court that its actions align with its fiduciary responsibilities to shareholders.”
The “new slate of independent directors” suggested in the “2025 Lifeway Foods Proxy Campaign” includes Edward and Ludmila.
Edward previously held CFO, COO, director and controller roles at the company, while Ludmila is a co-founder and former chair of the board.
Other suggested new directors include George Sent, an investment banker for the food and drink industry and former Lifeway chief independent director.
The Smolyanskys have been disgruntled with Lifeway for some time.
In July, the family members called for the group’s CEO and some of its directors to resign.
Edward at the time the decision was needed “to avoid further underperformance and mismanagement of company assets”.
Ludmila and Edward then filed a consent statement to unseat the board, including Julie, the following month.
In September, Danone, which already owned just over 23% of Lifeway, proposed to acquire the rest of the business for $25 per share – a 59% premium over the stock’s then-three-month volume weighted average price.
Lifeway rejected the offer on 5 November, arguing the bid undervalued the business. Danone raised its bid to $27 per share, which was backed by Edward and Ludmila Smolyansky, but rejected by the Lifeway board.
In late December, Danone then started preparing litigation against Lifeway, alleging the business broke a shareholder agreement between the two companies. It has since instigated proceedings.
The Activia producer has been an investor in Lifeway since 1999 and said Lifeway’s decision to award Smolyansky nearly 300,000 shares broke the deal.
Lifeway, however, insisted in January the agreement was void under state law in Illinois where the group is headquartered.
In March, the business said it was pursuing a “counterclaim” against Danone, accusing the French dairy giant of embarking on a “hostile takeover” of the group, at a price that “undervalues the company”.
In the statement yesterday, Edward Smolyansky said Lifeway was “contend[ing] with litigation stemming from clearly questionable conduct”.
He added: “The timing and magnitude of the $8.5 million aggregate CEO award in cash and shares – equating to more than 94% of Lifeway Foods’ 2024 net income – suggests that this board is far more interested in enriching the CEO than maximising value for all shareholders.”
In 2024, Lifeway saw a 16.7% rise in net sales to $186.8m. It booked a net income of $9m, down from $11.4m in 2023.
In a statement on its results released last week, the business said it was “on track” to achieve between $45m and $50m in adjusted EBITDA in its 2027 financial year. Just Drinks has asked Lifeway to confirm its adjusted EBITDA for 2024.
