/C O R R E C T I O N -- Edward and Ludmila Smolyansky/
Rhea-AI Summary
Edward and Ludmila Smolyansky, long‑term shareholders holding approximately 26% of Lifeway Foods (NASDAQ: LWAY), criticized the company's unilateral extension of its Shareholder Rights Agreement on Oct 29, 2025, which now expires Oct 29, 2026. The Smolyanskys say the extension was made without shareholder approval or explanation and occurred alongside an amended bylaw setting board size at 5–10 directors.
The statement notes no specific takeover bid prompted the move, highlights Danone's ~23% stake, and says Lifeway will report Q3 results on Nov 12, 2025. The Smolyanskys intend to nominate a director and seek a shareholder vote on the rights plan.
Positive
- Smolyanskys control approximately 26% of outstanding shares
- Nomination announced for director candidate George Sent
- Planned shareholder proxy process and public filings for 2025 annual meeting
Negative
- Rights Plan extended unilaterally to Oct 29, 2026
- Bylaws amended to fix board size at 5–10 directors
- Extension enacted without shareholder approval or disclosed rationale
News Market Reaction – LWAY
In the Nov 7 session, LWAY declined 0.53%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Extension protects entrenched board and management rather than maximizes
shareholder value; shareholders must demand an immediate vote.
On October 29, 2025, the Board of Lifeway Foods approved an amendment to its Shareholder Rights Agreement, extending its expiration date by one year to October 29, 2026. All other terms and conditions of the Rights Plan remain unchanged. This action was taken without shareholder approval or a provided explanation regarding its impact on shareholders.
This maneuver was taken by a management-aligned board on the eve of a "board refreshment" and leadership deadline, with a yet to be departed director present, Mr. Pol Sikar, who continues to serve on the board at this time. It also occurred just one day before Lifeway was obligated to name a new chairperson in connection with the deadline. This timing underscores Lifeway's lack of transparency and accountability in its governance culture.
Furthermore, on October 29, the Company amended and restated its bylaws to stipulate that the number of directors shall be no fewer than five (5) and no more than ten (10). Lifeway Foods is scheduled to announce its third quarter results on November 12 before the market opens.
"The board's unilateral extension is a power grab that shields management and already entrenched directors at the expense of ordinary shareholders," said Edward Smolyansky. "If the newly comprised board genuinely believes this plan serves shareholders, they should put it to a vote at the upcoming Annual Meeting," Smolyansky continued. "Instead, they rushed through an extension during a moment of director transition — a move that betrays fear of accountability and disregard for shareholder rights."
Concerns Over the Extension of the Rights Plan
The company's recent 8-K filing makes it clear that there was no concrete takeover bid or specific acquisition proposal driving the decision to extend the Shareholder Rights Agreement. Instead, the filing references only "concentrated ownership" and the possibility of share sales as justification. This reasoning is vague and insufficient, failing to provide a compelling explanation for continuing to implement defensive measures that could impact shareholder rights.
Moreover, this unilateral action stands in direct opposition to widely recognized governance standards. Influential proxy advisory firms such as Institutional Shareholder Services (ISS) and Glass Lewis have consistently advised against long-term poison pills—specifically those that extend beyond one year or are renewed without the express approval of shareholders. In their guidance, such actions should trigger adverse voting recommendations against incumbent directors who support these measures, highlighting the importance of transparency and shareholder involvement in major governance decisions.
This latest entrenchment follows sustained ownership concentration by Danone SA, which holds approximately
Call to Action
Shareholders deserve a transparent, accountable, and refreshed Lifeway board. We call on the company to:
- Immediately rescind the amendment extending the Rights Plan;
- Fully disclose the board vote, including each director's position and timing;
- Commit to a shareholder vote before any further renewal of the plan; and
- Honor true board refreshment, rather than rubber-stamping entrenchment measures on the eve of director departures and leadership deadlines.
If the board refuses, we will urge institutional investors and proxy advisory firms to hold the responsible directors accountable and to oppose the reelection of Lifeway's governance committee at the next annual meeting.
Important Information
The Rights Plan Extension and 8k follows a Letter delivered to the Company on October 17, 2025 by Mr. Smolyansky giving notice to Lifeway Foods, Inc. (the "issuer") of (i) his intent to nominate a candidate for election to the issuer's board of directors at the issuer's 2025 annual meeting of shareholders (the "Annual Meeting") and (ii) his plan to bring before the Annual Meeting, in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), a non-binding advisory shareholder proposal requesting that the issuer's Board of Directors establish a new committee of the Board of Directors that (x) consists solely of two or more independent directors who were first appointed or elected after the issuer's September 30, 2025 public announcement of its agreement to carry out an orderly refreshment of the Board of Directors, (y) is authorized and directed to conduct evaluations of the performance of the issuer's executive management team, the issuer's strategic plan and the issuer's strategic alternatives, and (z) is authorized to retain independent financial and legal advisors in connection with such evaluations.
For more information and to contact the shareholder group, follow Edward Smolyansky on LinkedIn.