Dubi Francis is selling Papaya Global shares at a 90% discount at a valuation of $444 million. In January 2023, the company's CEO, Einat Gas, announced her decision to withdraw the company's funds from Israel in protest against the legal reform. Frances, who opposed the move, protested the tension between him and Gas, during which she even threatened a lawsuit against him.
In a letter to the company's shareholders, Frances writes of his opposition to the move and that his attempts to amend it have been unsuccessful. Frances further claims that Group 11, a company he owns through which he owns Papaya Global, received no prior notice of the decision to withdraw money from Israel and that he personally and the company are under attack by Einat Gas, which led him to take the step.
Tens of thousands of demonstrators at the Kaplan junction in Tel Aviv to protest the legal reform // Photo: Giti Palti
"I responded publicly as well, not to the general issue but to the specific action related to the company's funds, and I urged the CEO not to implement her decision to withdraw the company's funds from Israel. To my astonishment and disappointment, this simple act of exploiting my freedom of expression while expressing an opinion different from that of the CEO on a matter related to the company led to an extreme and harsh reaction by the company's CEO, who apparently decided to declare war on Group 11 and me personally, using her powers as CEO and abusing them. As a result, in recent months Group 11 and I personally have come under attack by the company's CEO, who spares neither words nor actions in its fight against us," Frances wrote in a letter yesterday.
"Since the beginning of 2023, Group 11 has suffered from communication difficulties with the company's management and is unable to obtain full information about the company's activities and affairs... Group 11 has contacted the company on several occasions, some in writing, asking for the information to which it is entitled. On one occasion in 2023, the company agreed to partially correct its violations and provide at least some of the missing information after an unexplained and unjustified delay of several months, but since May 2023 until now, the company has again breached its obligations, ignoring Group 11's repeated requests for the missing information. It is evident that this conduct stems from explicit instructions by the CEO not to fulfill the company's obligations. Group 11 suspects that such misconduct has been and continues to be applied to other investors, company stakeholders and customers.
Protest by high-tech professionals against the legal reform, photo: Yehoshua Yosef
"Moreover, and what was the 'straw that broke the camel's back' for Group 11, in recent weeks the company's CEO has sabotaged and continues to sabotage our efforts to sell our holdings in the company by refusing to cooperate not only with us but also with third and other parties and provide the information required to facilitate a sale transaction."
"... We made several attempts to correct the situation, but without success. The CEO is determined to stick to her aggressive approach. We believe she is wrong. We believe that all concerned should act reasonably, rationally and responsibly in order to find a solution in a good spirit and avoid legal disputes as much as possible. It is clear to us that a legal dispute is contrary to the interests of all concerned: the company, its shareholders, employees, suppliers and customers, Group 11 itself and its investors (including some of Israel's largest institutional investors, representing the interests of hundreds of thousands of employees and retirees), as well as the CEO herself.
The high-tech protest in Kaplan and the hourglass display that is running out // Credit: Or Adar
Accordingly, we are committed to finding a solution in good spirit even if we are not treated similarly. In this spirit, Group 11 is convinced that separation by selling our holdings in the company is the right course of action in order to resolve the current situation. That was the basis and that was the purpose of my appeal to you on July 18.
As some of you know, Group 11 was unable to sell its holdings in the company's shares after my previous announcement. This is partly due to a lack of interest/response from some of you and partly from a lack of cooperation on the part of the company: the company did not provide the information required to support the sale to an interested party that expressed interest in acquiring a substantial portion of Group 11's holdings at a price per share reflecting a 75% discount on the company's value in the most recent financing round. We are now seeking to make another attempt to sell our holdings in the company."
Anat Gas tweeted in response: "The best thing that happened to me today - an opportunity to buy shares at floor price in a company I believe in very much (objectively), and bring valuable investors into the company."
The best thing that happened to me today was an opportunity to buy shares at a floor price in a company I believe in very much (objectively), and bring valuable investors into the company.
Stocks at a tenth of the price: the surprising move of Frances Bear https://t.co/ChrmvxAn89
— Eynat Guez (@EynatGuez) August 29, 2023
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