Asaf Rappaport and Yitzhak Tshuva Compete to Acquire Herzliya Medical Center

Asaf Rappaport and the founders of Wiz are negotiating to purchase approximately 25% of the private Herzliya Medical Center, valued at over one billion shekels, according to Globes. About six months ago, it was reported that the Delek Group, controlled by Yitzhak Tshuva, was close to a similar deal, which was blocked by the Ministry of Health. Currently, both parties remain interested, creating competition for the acquisition, though regulatory concerns may prevent either deal from closing.

In both potential transactions, some shares would be bought from Yair Landau, who controls 50% of the hospital, and from Clal Insurance, which holds about 10%. Following the deal, Clalit Health Services is expected to retain 40% ownership alongside the new investors and Landau, who would keep part of his stake. However, the Ministry of Health opposes the deal due to a regulatory shift encouraging private hospitals to serve as providers for public healthcare, with most services now purchased by health funds through public funding mechanisms.

This regulatory trend means that most large private hospitals in Israel operate under models where health funds hold significant stakes or influence. For example, Assuta is fully owned by Maccabi, and Medica, formed from a merger of several hospitals, is 55% owned by Leumit and Meuhedet health funds. The Ministry of Health has declared that any ownership change at Herzliya Medical Center must include Clalit increasing its share to over 50%, requiring agreement from both Clalit and Landau.

The Delek Group’s initial plan was to expand the hospital network and open new facilities, including in peripheral areas. However, despite the Ministry’s preference for a hybrid public-private model, strict regulations are expected to limit expansion and new hospital establishments due to concerns about budget pressures and workforce shortages in public healthcare.

Herzliya Medical Center, established in 1982 and located on a 9,000 square meter site in Herzliya, performs about 26,000 surgeries annually and holds broad surgical licenses. Clal Insurance acquired its 10% stake in 2016 at a valuation of 700 million shekels. Given the regulatory environment, this acquisition represents one of the last opportunities to enter private hospital ownership in Israel, potentially sparking significant competition if the parties can meet the Ministry’s conditions.