InMode Shares Rise as Steel Partners Offers $16.75/Share, Topping CEO's Bid

Shares of InMode Ltd. (NASDAQ:INMD) rose 4% in premarket trading Thursday after significant shareholder Steel Partners Holdings L.P. submitted an all-cash offer to acquire the company for $16.75 per share.

The Buyout Offer

Steel Partners' proposal, detailed in a letter to InMode's board, represents a 20% premium to what it called the stock's unaffected price of $13.95. The offer also exceeds a competing $16.20 per share proposal from InMode's Chief Executive Officer, Moshe Mizrahy.

Under the terms of the Steel Partners bid, existing shareholders would have the option to roll over up to 40% of the company’s equity into the newly private, Steel-owned entity. The firm has requested a substantive written response from InMode's independent directors by 5:00 p.m. Eastern on July 13.

Allegations and Demands

In its letter, Steel Partners called for the immediate removal of CEO Moshe Mizrahy, citing concerns about his conduct during the company's ongoing strategic review. The activist investor also urged the board to form an independent special committee to evaluate its offer.

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Steel Partners raised several serious allegations against Mizrahy, including:

• Questionable Trading: The letter alleges Mizrahy acquired approximately 800,000 shares between February 24 and March 10, shortly before a March 13 share buyback announcement that lifted the stock. Steel Partners questioned whether this constituted trading on material non-public information.
• Low Valuation: It noted that Mizrahy’s own buyout offer values InMode using an estimated 2026 adjusted EBITDA of $65 million, significantly below the company's official guidance of $73 million to $78 million issued on May 6.
• Conflicts of Interest: The firm described Mizrahy's bidding group as conflicted, as it reportedly includes the principal owner of InMode's main manufacturing facility and the owners of its UK distributor.

Context for Investors

The competing offers create a potential bidding situation for InMode, which could drive shareholder value in the short term. However, the serious allegations of poor corporate governance leveled by Steel Partners against the current CEO introduce significant uncertainty. Investors will be closely watching how InMode's board, particularly its independent directors, responds to the demands and the higher offer.