Steel Partners Makes Competing Bid for InMode
InMode Ltd (NASDAQ:INMD) shares gained 4% in pre-market trading on Thursday after Steel Partners Holdings L.P. submitted a proposal to acquire the medical aesthetics company for $16.75 per share in cash.
Steel Partners, one of InMode’s major shareholders, said its offer represents a 20% premium to the company’s unaffected share price of $13.95 and tops the competing $16.20-per-share bid previously put forward by Chief Executive Moshe Mizrahy.
Under the proposal, existing shareholders would also have the opportunity to roll over up to 40% of their equity into the privately held InMode under Steel Partners’ ownership.
Investor Calls for Independent Review
In a letter sent to InMode’s board on Wednesday, Steel Partners urged directors to establish an independent special committee and appoint an external investment bank to evaluate and negotiate its proposal.
The investment firm also called for Mizrahy to be removed as chief executive, arguing that his actions during the company’s strategic review had created governance concerns.
Questions Raised Over Share Purchases
Steel Partners alleged that Mizrahy purchased approximately 800,000 InMode shares between 24 February and 10 March, shortly before the company announced a share buyback programme on 13 March that pushed the stock nearly 6% higher.
The firm said those transactions raise questions about whether material non-public information may have been involved.
Steel Partners also argued that Mizrahy’s own takeover proposal values InMode using projected 2026 adjusted EBITDA of $65 million, below the company’s guidance issued on 6 May, which forecasts adjusted EBITDA of between $73 million and $78 million.
Concerns Over Buyer Group Structure
The letter further argued that Mizrahy’s buyer group presents potential conflicts of interest.
Steel Partners noted that the consortium includes Jeffrey Royer, the principal owner of Medimor, which operates InMode’s primary manufacturing facility, as well as the owners of Wigmore Medical, the company’s U.K. distribution partner.
Steel Partners has requested a substantive written response from InMode’s independent directors by 5:00 p.m. Eastern Time on 13 July.