[DFAN14A] Lifeway Foods Inc SEC Filing

Rhea-AI Filing Summary

Edward and Ludmila Smolyansky, owners of approximately 26% of Lifeway Foods (NASDAQ: LWAY), have filed a definitive Consent Statement (July 2 2025) to remove the current board and seat seven new directors. The pair say early shareholder outreach shows growing support.

• Governance dispute: The activists accuse the board of delaying the 2025 AGM, refusing to set a record date and adopting a poison pill after dismissing Danone’s unsolicited $27 per-share offer as inadequate.
• Director sell-off: Lead independent director Jason Scher sold 24,566 shares (~$600k at $24.23), leaving only one share and apparently breaching Lifeway’s 200% retainer stock-holding policy.
• Call to action: Shareholders are urged to sign WHITE consent cards; the full solicitation materials are available on the SEC website.

Positive

• 26% shareholder bloc launches definitive consent solicitation, increasing probability of board change or strategic transaction.
• Director’s near-total stock sale undermines board’s undervaluation argument and may galvanize additional shareholder support for activists.

Negative

• Protracted governance conflict could impose legal costs and distract management from operations.
• Board’s refusal to set record date introduces legal uncertainty that could delay any resolution.
• Postponed 2025 annual meeting signals ongoing shareholder-management friction and may weigh on sentiment.

Insights

Corporate Governance Expert

TL;DR Fierce consent battle highlights deep governance rift; regulatory hurdles and board tactics could prolong uncertainty.

The Smolyanskys’ 26% stake gives their consent drive credibility, but success still requires majority written consents. The board’s refusal to set a record date and its poison-pill defense create legal friction that could delay or invalidate the process. Director Scher’s large divestiture undercuts the board’s public stance that Danone’s $27 bid undervalues LWAY, raising questions about policy compliance and director confidence. While activism can unlock value, the confrontation risks distraction, legal expense and share-price volatility until the dispute is resolved.

Portfolio Manager

TL;DR Activist momentum and insider share sale tilt odds toward change, a potential catalyst for valuation re-rating.

The activists already control a sizable block and appear to be gathering further support. If they win, investors could see either renewed negotiations with Danone or operational changes aimed at higher profitability. Scher’s exit trade at ~10% below Danone’s offer price signals possible misalignment and may sway undecided holders. Near-term volatility is likely, but the probability of a strategic transaction or board refresh—both typically value-accretive—has increased.

FOR IMMEDIATE RELEASE

 

Edward and Ludmila Smolyansky Provide Update on the Definitive Consent Solicitation Process Currently Underway and Respond to Lifeway Foods, Inc. (NASDAQ: LWAY)

 

CHICAGO, July 11, 2025 /PRNewswire/ — Edward and Ludmila Smolyansky, long-term shareholders of Lifeway Foods, Inc. (NASDAQ: LWAY) who together exercise voting control with respect to approximately 26% of the outstanding shares of Lifeway Foods, today provided an update on the consent solicitation process launched through the filing of a definitive Consent Statement with the U.S. Securities and Exchange Commission (SEC) on July 2, 2025.

 

Consent Solicitation Gains Momentum

 

"Our outreach program is fully underway, as momentum continues to build behind our consent solicitation," stated the Smolyanskys. "We are encouraged by the positive response from fellow shareholders who share our concerns about the current Board's actions."

 

Response to Lifeway Foods

 

On July 3, 2025, the Company issued a press release stating its view that the consent solicitation is legally deficient because the public filing of the Consent Statement does not constitute adequate notice to shareholders, and because the Board has not set a record date. The Company further “urged” shareholders to “disregard the Smolyanskys’ recent filings….”

 

However, the Company failed to acknowledge that both a record date and a shareholder list were formally requested by Mr. Smolyansky in a letter dated June 17, 2025—a request that remains unfulfilled.

 

Mr. Smolyansky responded:

 

“Predictably, the Board is seeking to suppress shareholders and avoid accountability yet again. Regardless of which side they support, all shareholders should be offended that their directors, having already postponed the Company’s 2025 annual meeting, are apparently planning to challenge our written consent based on their own failures to act. Shareholders do not need further evidence that this Board will never respond to Lifeway’s shareholders until it is forced to do so under law, and we ask all shareholders to help us achieve that goal by signing and returning the WHITE consent card, as described in our definitive consent statement.”

 

Board Actions Contradict Own Statements

 

Even more concerning, recent securities filings suggest that Board leadership does not believe the Board’s own statements in a prior press release that Danone’s $27 per share offer “severely undervalues the Company,” which it has used as justification to adopt a poison pill.

 

Jason Scher, the lead independent director and Chairperson of the Audit and Corporate Governance Committee, sold 24,566 of his 24,567 shares for nearly $600,000 at an average share price of $24.23. His Form 4 filings over the last two weeks indicate he now owns only a single common share of Lifeway Foods. These sales appear to violate the Company’s director stock ownership and holding policy, which requires that Mr. Scher hold Lifeway shares valued at 200% of his annual retainer. Edward and Ludmila Smolyansky call on the Board to address why this does not violate its policy, and how Mr. Scher’s sales are consistent with the Board’s purported view that Danone’s offer undervalues the Company.

 

 

 

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Mr. Smolyansky reacted:

 

"Director Scher selling nearly all of his shares last week is a very troubling indicator about what the Board plans for the Company and what impact those plans will have on the stock price," Mr. Smolyansky stated. "How can shareholders trust Board members who are divesting their own holdings while telling us to reject a $27 per share offer they claim 'severely undervalues' the Company?"

 

Call to Action

 

Edward and Ludmila Smolyansky request that shareholders execute and return WHITE consent cards, in accordance with the instructions in their definitive consent statement. For more information and to contact the shareholder group, visit and follow on Linkedin

 

Important Information

 

This communication is not a request for a proxy to vote on, or shareholder consent with respect to, any matter. Any written solicitation of a proxy or shareholder consent by Mr. Smolyansky or Mrs. Smolyansky will be made through a definitive proxy statement or definitive consent statement, including the definitive consent statement filed by them with the SEC on July 2, 2025 (the “Consent Statement”). Lifeway shareholders are urged to read the Consent Statement, including any amendments or supplements thereto, and any other soliciting materials, when they become available as they will contain important information. Shareholders may obtain, free of charge, copies of the Consent Statement and other relevant documents at sec.gov.

 

Participants in the Solicitation

 

Mr. Smolyansky and Mrs. Smolyansky filed the Consent Statement with the SEC on July 2, 2025, which relates to, among other matters, their intent to seek shareholder consents to remove Lifeway’s current board of directors and elect each of Ludmila Smolyansky, Edward Smolyansky, Richard Beleutz, Cindy Curry, Michael Leydervuder, George Sent, and Robert Whalen (each, a “Nominee”) as directors of Lifeway. In addition, Mr. Smolyansky filed a preliminary proxy statement with the SEC on April 16, 2025, relating to his intent to nominate each Nominee for election as directors of Lifeway at its 2025 annual meeting of shareholders. Each Nominee may be deemed to have an interest in any solicitation of written consents or proxies by Mr. Smolyansky and Mrs. Smolyansky, as applicable.

 

The participants (the “Participants”) in any solicitation of shareholder consents or proxies by Mr. Smolyansky or Mrs. Smolyansky may be deemed to be Mr. Smolyansky, Mrs. Smolyansky and each of the other Nominees. Lifeway shareholders can obtain information regarding the Participants and their direct and indirect interests, by security holdings or otherwise, in Appendix B to the Consent Statement, which information is incorporated herein by reference.

 

 

 

 

 

 

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FAQ

Why are the Smolyanskys soliciting consents at Lifeway Foods (LWAY)?

They seek to remove the existing board and elect seven new directors, citing governance concerns and resistance to shareholder input.

How much of Lifeway Foods’ stock do the Smolyanskys control?

They exercise voting control over approximately 26% of outstanding shares.

What triggered the governance dispute with Lifeway’s board?

Key issues include the board’s poison pill after rejecting Danone’s $27 bid, postponement of the 2025 AGM and refusal to set a record date for the consent solicitation.

Why is Director Jason Scher’s share sale significant?

Scher sold 24,566 shares (~$600k), leaving one share, potentially breaching the director stock-ownership policy and contradicting claims that $27 undervalues LWAY.

How can shareholders participate in the consent solicitation?

Shareholders are asked to sign and return the WHITE consent card; full instructions are in the definitive Consent Statement filed with the SEC.