Wiz Founders Enter Talks to Acquire 25% Stake in Herzliya Medical Center Amid Ownership Dispute

Yitzhak Tshuva is stepping back from his planned acquisition of Herzliya Medical Center as his exclusivity period for completing the deal has expired. Yair Landau, the controlling shareholder of the private hospital, has begun preliminary negotiations with a group of four founders of the cybersecurity company Wiz: Assaf Rappaport, Yinon Costika, Ami Lotback, and Roy Reznik. Each of these entrepreneurs earned $3 billion from selling Wiz to Google and now manage their ventures through a family office run by Yotav Costika, Yinon's brother.

The Israeli Ministry of Health, which effectively blocked Tshuva’s purchase, insists that Clalit Health Services increase its ownership stake in the hospital to a controlling level as a condition for any transaction. Currently, Clalit holds 40% of Herzliya Medical Center’s shares, while Landau owns 50%, and Clal Insurance holds 10%. This regulatory demand casts doubt on the deal’s prospects, though discussions continue.

Tshuva, who controls Delek Group, signed an agreement in January to buy 27% of the hospital’s shares at a valuation of 1.1 billion shekels. He acquired 25% from Landau, who retains 50%, while Clalit and Clal Insurance hold their respective stakes. Tshuva has made significant efforts to persuade the Ministry of Health to approve the deal, including meeting with Health Ministry Director-General Moshe Bar Siman-Tov, but the ministry refuses to allow Tshuva and Landau to jointly hold more than 50%.

The Ministry of Health’s insistence on Clalit’s control aligns with its broader policy requiring health funds to control private hospitals. This stance has cooled interest from other potential buyers, including a nursing and staffing services company and the Wiz founders, who are cautious about entering a heavily regulated sector. The negotiations with the Wiz founders are reportedly based on the same valuation Tshuva agreed to.

One possible resolution could involve Clal Insurance selling its entire 10% stake, enabling Clalit to increase its holding to 50%, while the new buyers acquire half of Landau’s shares. Herzliya Medical Center, established in 1982 and employing around 600 staff on 9,000 square meters, performs 26,000 surgeries annually, including cardiac, neurosurgery, and oncology procedures. The hospital’s real estate remains owned by Landau. The hospital is managed by Danny Engel.

In 2016, Clal Insurance invested in the hospital by purchasing 10% of shares at a valuation of approximately 700 million shekels. In 2021, Landau sold 10% of his shares to Clalit, which was expected to increase its stake to 50% in a second phase, but the Ministry of Health blocked this move, leaving Clalit at 40%. The ministry’s letter to Clalit in February emphasized the expectation that Clalit would control the hospital’s surgical volume and board, effectively requiring a majority stake to favor public healthcare interests.