#None #DOMA Capital #InMode Ltd #shareholder activism

DOMA Perpetual Capital Management Questions InMode Acquisition Proposal

In a recent development in the corporate governance space, DOMA Perpetual Capital Management LLC, a notable shareholder in InMode Ltd. (NYSE: INMD), has come forward to express strong opposition against the company's proposed buyout. This acquisition, spearheaded by InMode's CEO along with a consortium of investors, has raised significant concerns among stakeholders regarding its fairness and potential conflicts of interest.

The Offer and Its Implications

DOMA alleges that the proposed offer price of $16.20 per share considerably undervalues InMode, especially when considering the company's long-term growth potential. According to DOMA’s assessment, this offer is a result of a long-standing period of operational underperformance attributed to the current CEO's leadership. They argue that this proposed transaction seems to leverage the diminished valuations that are primarily due to the CEO's prior decisions and actions during a time of persistent underachievement.

In a letter directed to the Board of Directors of InMode, which DOMA has made publicly available, the firm articulates its deep concerns. DOMA indicates that this transaction might permit management to exploit the decreased stock value that they themselves contributed to during their tenure. This scenario signals potential governance shortcomings, as it raises alarms about management prioritizing insider gains over shareholder interests.

Calling for Action

In light of these troubling circumstances, DOMA urges the InMode Board to take several crucial steps:

1. Formation of an Independent Committee: It is advised that the Board establish a fully independent special committee free from management ties to rigorously evaluate the acquisition proposal.
2. Retaining Advisors: Engaging independent international financial and legal advisors is necessary to conduct a thorough valuation and fairness assessment of the proposed transaction.
3. Market Check: Conducting a transparent market check should be a priority, inviting public offers to explore if there are more favorable alternatives available.
4. Full Disclosure: The shareholders deserve complete and fair disclosure concerning the transaction process, alongside insight into the assumptions made and any potential conflicts of interest at play.

The ramifications of not addressing these concerns could potentially lead to significant detriment in shareholder value, along with reputational and legal risks for InMode. DOMA’s position reflects a broader demand within the investment community for higher governance standards and accountability in corporate transactions.

Looking Ahead

As a significant shareholder owning approximately 4.63% of InMode’s outstanding shares, DOMA’s objections are noteworthy in the context of shareholder activism. The firm has made it clear through its public communications that it intends to vote against the proposed acquisition under the current terms. In a market landscape where shareholder rights and company governance are increasingly scrutinized, DOMA’s stance underscores a collective call to action among investors seeking to defend their interests and ensure fair practices in corporate governance.

In summary, DOMA Perpetual's challenge against InMode's acquisition proposal raises essential questions about valuation, governance integrity, and the responsibilities of management towards shareholders, signaling a possible turning point for corporate governance in the face of shareholder activism.