Add Signal Apparel to the list of failed sportswear companies. I knew the last CEO of Signal, a fellow by the name of Tom McFall. McFall had an investment banking background and made a series of acquisitions without much thought as to how the various pieces would be integrated. McFall, who was pretty sophisticated, actually issued a toxic convertible without understanding the ramifications. He was able to redeem it, but had to pay a premium. Signal eventually went bankrupt and was dismembered. Hank Aaron was on the board of directors. I recall that McFall was very interested by the Yahoo message board for Signal, taking great amusement in the hype surrounding his company. He never had any hard dollars in the company, just a ton of options. A bad guy.
Lifeway Foods, Inc. (LWAY) is a good acquisition candidate. Danone Foods, Inc. owns 20.5% of the company. In October 1999, after Danone acquired their interest, LWAY entered into a Shareholder’s Agreement with Danone. According to the terms of that agreement, Danone agreed not to purchase any additional shares in LWAY and the two companies agreed not to compete in certain product lines for a five year period. The agreement expired at the end of September, though the two companies have extended it through the end of the year while they attempt to negotiate a new agreement.
As you pointed out, Danone purchased a 40% interest in Stonyfield Farms, a NH-based manufacturer of natural and organic yogurts and ice cream, in 2001. In 2003, they purchased all of the non-employee owned shares and now own 85% of the company.
Message 20714605
If Danone does not buy LWAY, someone else will.
A thread for LWAY can be found at:
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