A shareholder in Inmode wants to purchase the company and oust the CEO

This is a price about 15.8% higher than the closing price on Wednesday. This actually opened a new control struggle over Inmod: a few weeks ago the company’s founder and CEO, Moshe Mizrahi, submitted his own offer to purchase it. Steel Partners’ offer is higher. At this point, an official report to the SEC about the offer has not yet been submitted. However, the potential buyer has published the letter it sent to Inmod’s shareholders, in which it demands that the board of directors take immediate action to remove Mizrahi from his position as CEO and to establish an independent committee in order to examine its proposal for the purchase of Inmode.

According to Steel Partners, it is a long-time shareholder in the company, and its offer is not dependent on any external financing conditions. “Our proposal is superior to the CEO’s proposal in every sense,” it says. They accuse Mizrahi of leading a disappointing strategic process that allegedly included “manipulation of market expectations and the value of the company.”

They ask the board members if they intend to fulfill their obligations to all shareholders by accepting a better offer, or allow a group of interested parties to purchase the company at an inappropriate price. “Whether the company is sold or not, Moshe Mizrahi is no longer qualified to be the CEO,” they claim. In their letter, Steel Partners raises a series of allegations, including a conflict of interest, a lack of independence in the board of directors’ inspection committee, and even “potential violations of securities laws and the Israeli Companies Law.”

This is the second letter that Steel is sending to the Inmod board of directors, after last week it raised allegations regarding Mizrahi’s offer to purchase the company. Steel Partners was founded and is managed by Warren Lichtenstein who is the one who signed the letters to the Inmod board of directors. The company did not respond publicly to the previous letter.

Earlier this year, Inmod put out a tender for the sale of the company and received offers from two groups – an investor group led by Mizrahi alongside businessman Meir Shamir, and a Korean private equity fund called Centroid. Finally, the board of directors decided to reject the two offers that were higher than the current offers. However, it is quite possible that a struggle for control of the company will lead to an increase in the price of the existing offers.