Control Struggle at Novolog: Eli Dahan Offers 100 Million Shekel Investment

A struggle for control is developing at the healthcare services company Novolog, between controlling shareholder Ehud Pozis (27%) and Eli Dahan, owner of the Movement company, who sold two companies to Novolog at the end of the last decade. Now, Dahan is offering the Novolog board of directors to invest 100 million shekels in the company in exchange for an allocation of 21% of its shares, which lost 77% of their value at their peak in 2022.

Novolog deals with a variety of health services: logistics (distribution of medicines and medical equipment), home care, and digital health. The company was founded in 1966 by Eliezer Pozis and grew under the management of his son Ehud (Udi), who previously brought the FIMI fund into the company as a partner, and later took it public on the stock exchange in 2017.

Novolog grew rapidly, especially during the COVID-19 period, and made many acquisitions. At its peak, it was traded at a value of 1.8 billion shekels, but following a series of investment write-offs, the stock plummeted to a price reflecting a value of only 415 million shekels for the company today.

According to market sources, Pozis (73) intended to sell his stake in Novolog at the beginning of the year, after retiring from his position as chairman at the end of 2024. After the sale did not materialize, he passed the reins to his son, Oded, who was appointed as a director in May of this year. This move caused tension in the board of directors, as according to Pozis the son, the board of directors did not share information with him.

Questionable timing

Members of the board of directors, headed by the new chairman Arik Shor (former CEO of Tnuva), were appointed in the past with the involvement of Pozis the father. Did the tension with his son lead to the search for an investment offer in the company? The parties disagree on this.

Oded Pozis agrees that there is tension. In a letter he submitted to the board of directors at the end of the week, he claims that a "grim and worrying picture of a severe, deep, and ongoing management failure, bordering on actual criminal negligence" is painted. The board members, he claims, felt that a change was coming in the company, including the replacement of all directors, and therefore turned to Movement with a request for an investment that could fortify their status.

Sources close to Pozis note that last week he announced the convening of a shareholders' meeting with the goal of replacing the board of directors, and only in the evening of that same day did Dahan's investment offer arrive.

Sources in the environment of Pozis the son add that the company does not need an investment at all, as it has cash in the coffers (163 million shekels as of the end of the first quarter), and it has been distributing dividends in recent years. According to them, Dahan is offering an investment in exchange for only 21% of the company, so he does not need the approval of the shareholders' meeting, but if he is coordinated with the board of directors, it hints that he is expected to effectively control the company.

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Not at the request of the board of directors

In Dahan's environment, they claim that he has been examining the possibility of investing in Novolog since the beginning of July, and even approached Oded Pozis on the matter a few weeks ago. According to those close to him, there was no connection between the tension in the Novolog board of directors and Dahan's offer.

Sources in the Novolog leadership add that the board of directors did not know about Dahan's offer until it was submitted, and certainly did not turn to ask for it. They add and claim that the company needs the capital to carry out moves that will lead to renewed growth.

Dahan has known Novolog for many years. In 2019, he sold the public company the companies Target Care and Infomed for a total sum of 82 million shekels (in cash and shares). As a result, he became the owner of 8% of the company's shares and even signed a joint control agreement with Udi Pozis until the beginning of 2023, when the agreement was canceled and Dahan sold his shares.

His current offer, at a 5% premium on the market price of Novolog's stock on the day of its submission, is a binding offer, without due diligence, valid until August 6, this week.

Pozis, for his part, is calling, as mentioned, for a shareholders' meeting for the purpose of replacing the board of directors. If the entities holding the company's shares (Harel, Migdal, Phoenix, Clal, and Mori Arkin) support him, he will be able to prevent the investment, as the board of directors will not be able to discuss it. If the board of directors is not replaced, it is, as mentioned, authorized to approve it without a shareholders' meeting.

Dahan's Movement is a group of companies in the field of fitness, quality of life, and health, so he comes with experience in the industry and a strategic plan for the company. Oded Pozis has experience in investments, but not in managing companies of Novolog's type, although he can rely on his father's experience.

From Pozis's side, it is claimed that the investor Dahan will continue to support the current management, while Novolog requires a radical change. The company, usually profitable, recorded a loss of 39 million shekels in 2023 due to value write-offs for acquisitions it made during the period of the previous CEO, Eran Taus.

Another crisis struck it last year following the replacement of the ERP system (corporate customer management system produced by SAP), which failed and led to the disruption of its operations for several months. In response, some customers left the company or withdrew part of their business with it.

In 2025, it recovered slightly and recorded revenues of 1.8 billion shekels, a 10% decrease from the previous year, and the profit plummeted by more than 50% to 24 million shekels.