Steel Partners Renews Fight for Medical Device Firm InMode
Translated & summarized from Calcalist by baba
US investment fund Steel Partners is renewing its bid to acquire medical device company InMode, with its $16.75 per share offer set to expire on October 30th. The fund accuses InMode's board of failing to engage in good-faith negotiations and is threatening legal action. Steel Partners' offer values the company at $980 million, while founder Moshe Mizrahi has a competing bid. The fund also alleges conflicts of interest and poor corporate governance by the current board.
The story in 6 lines · by baba
- Steel Partners renewed its bid to acquire InMode for $16.75 per share, valuing the company at $980 million.
- The fund's offer expires on October 30th, and it threatens legal action against InMode's directors.
- Steel Partners accuses the InMode board of refusing to negotiate and of conflicts of interest.
- Founder Moshe Mizrahi has a competing offer of $950 million, or $16.20 per share.
- Earlier bids for InMode valued the company at $1.1 billion.
- Steel Partners cites InMode's declining business results and alleged governance failures.
US investment fund Steel Partners is reigniting its battle for control of medical device company InMode, challenging founder Moshe Mizrahi. The fund announced that its offer to purchase all company shares at $16.75 per share will expire on October 30th. Steel Partners is threatening legal action against InMode's directors if they do not engage in discussions regarding the offer.
According to Steel Partners Chairman Warren Lichtenstein, InMode's board has avoided substantive negotiations for three months since the offer was submitted. The company has not signed a confidentiality agreement, opened a data room, or provided necessary documents for due diligence. Steel Partners' offer values InMode at $980 million, with the bid first submitted on July 9th.
InMode, which produces medical aesthetics devices, was founded by Moshe Mizrahi, who holds 7% of the company's shares and serves as CEO. Mizrahi himself has submitted a competing offer to acquire InMode with other investors for $950 million, or $16.20 per share. Earlier this year, InMode conducted a sale process that received two higher bids, valuing the company at $1.1 billion, from South Korea's Centroid Investment Partners and investors led by Mizrahi and Meir Shamir.
Shortly after its initial offer, Steel Partners demanded Mizrahi's removal as CEO and the formation of an independent committee to review its bid, citing a conflict of interest. Steel Partners draws a parallel to a similar situation at ZIM, where the board led to the departure of CEO Eli Glickman, who had sought to acquire the company with Rami Unger.
Steel Partners alleges that InMode's board members have violated their fiduciary duties, pointing to long-standing business relationships, joint board memberships, and transactions between InMode and director-affiliated companies. These connections, Steel Partners claims, raise doubts about the board's ability to make independent decisions and objectively evaluate the acquisition offer for the benefit of all shareholders. The fund also highlights InMode's deteriorating business results as further evidence of the board's alleged failures in oversight and in conducting a fair acquisition review process, suggesting that directors unable to perform these functions should be replaced by shareholder-elected individuals.
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