Elron Investment Group Chairwoman Ousted, Threatens Legal Action

The leadership struggle within the control group of the investment company Elron has escalated, with the company's board of directors voting to remove Chairwoman from her position. The decision was made during a board meeting convened at the request of two controlling directors. In response, Bachar-Menucha sent a warning letter threatening legal proceedings against the move.

Elron is currently trading at a valuation of NIS 150 million, following a 48% decline in its stock price over the past year. The conflict centers around Bachar-Menucha on one side, and the Arieli Capital group, comprising partners Oren Renoff and Ronen Bentov, on the other. Both factions are partners in the Arieli EL company, established to acquire Elron and now holding a 58% stake in it.

The tension between the parties began several months ago. Approximately a month prior, Bachar-Menucha filed a police complaint alleging that Renoff and Bentov had threatened her and her family. This dispute intensified after stock price drops led to a failure to meet the terms of a NIS 90 million loan taken from Phoenix Investments House to finance Elron's acquisition. The Arieli EL group had pledged its Elron shares as collateral for the loan, raising concerns that Phoenix might seek another buyer.

Disagreements over how to resolve this financial issue led to the police complaint, alleged threats, and now Bachar-Menucha's ouster. A formal agreement regarding the loan with Phoenix has not yet been announced. Elron recently stated that significant funds were transferred to the lender, reducing the debt and extending the repayment period until October 2026, with efforts underway to finalize the remaining debt settlement this month.

During the board meeting where Bachar-Menucha was removed, Dan Hoaz was appointed as interim chairman. He previously served as the company's chairman and director. New directors appointed include Ido Heller, a former senior partner at PwC Israel, and attorney Yaniv Rog, who is a director in companies within the Alon Blue Square group. Dana Garner, former CFO of Cellebrite, is expected to be appointed as an external director at the next general meeting.

Arieli Capital began operations in Israel about a decade ago, investing in startups. The group's capital primarily comes from the Renoff family, a New York-based Jewish family with Wall Street connections. Bachar-Menucha, formerly a partner at Catalyst Fund, was the professional lead in the controlling group and was appointed Elron's chairwoman. Arieli EL acquired control of Elron from Discount Investments about two years ago for approximately NIS 200 million. Since then, the company's stock has fallen about 35%. Elron previously focused on medical devices and software, with past exits including Given Imaging and Cartiheal. Bachar-Menucha shifted the company's focus to defense-tech and cyber, leading to six divestitures and 20 new investments totaling $12 million since she took office.