“Improper Conspiracy” and “Poison Pill”: The Battle for Control of Novolog
The Pozis family, controlling shareholders of Novolog, has accused the board of directors of attempting to entrench power through a 100 million shekel investment deal with the Movement group, sparking a corporate power struggle.
“An improper conspiracy whose sole purpose is to entrench control, preserve the power of the incumbent directors, thwart the will of the shareholders, and strip them of their voting rights.” This is how representatives of the Pozis family, the controlling shareholder of the Novolog healthcare services group, described in a warning letter the offer from the Movement group to invest 100 million shekels in exchange for a 21.34% stake.
If completed, this move would make Movement the largest shareholder and dilute the Pozis family’s 26.7% holding. The company’s announcement sparked a fierce struggle for control. Amidst harsh mutual accusations, investors reacted with optimism, driving the share price up by 15% over the last two trading days, fueled by expectations of capital inflow and a potential management shake-up.
The Timeline of the Dispute
The storm at Novolog went public on Wednesday evening when the company reported the offer from Movement, controlled by Eli Dahan. The offer was made without conditions or due diligence, with a strict deadline of August 5.
About an hour and a half later, Novolog reported that the Pozis family had demanded an extraordinary shareholders' meeting to replace the board of directors. The family claims the reporting order was biased, arguing that their demand was submitted before the Movement offer was registered, creating a “chronological reversal” intended to mask the defensive nature of the deal.
Perspectives
The Pozis family characterizes the deal as an “aggressive corporate tool”—a “poison pill” designed to prevent board replacement. They argue the company does not need the capital and that the move is merely a cover for the personal survival of the incumbent directors.
Conversely, institutional market sources suggest that Movement’s entry could boost Novolog after years of difficulties, including asset write-downs, the loss of a key client (Pfizer), and distribution system failures that caused annual revenues to drop by over 200 million shekels.
Novolog stated: “The company and the board of directors act professionally and responsibly with only the company's best interest in mind. The letter received will be examined by the board in accordance with the law.” Eli Dahan, who controls Movement, expressed confidence that the board would recognize the significant opportunity inherent in the investment offer.
The situation remains volatile: on Friday morning, independent director Anat Gabriel announced her resignation.
