SCHEDULE: Phoenix Financial Demands Shareholder Vote to Overturn Perion Network's Rights Plan

Phoenix Financial Ltd., holding a 5.72% stake in Perion Network Ltd., has formally requested an extraordinary shareholder meeting to amend the company's articles of association and cancel a recently adopted rights plan.

Summary

• Phoenix Financial Ltd., through its subsidiaries, beneficially owns 2,574,926.52 ordinary shares of Perion Network Ltd., representing approximately 5.72% of the outstanding shares.
• On June 26, 2025, Phoenix Insurance Company Ltd. and Value Base Fund, Limited Partnership (VBF LP), collectively holding 11.48% of Perion's voting rights, sent a Demand Letter to Perion's Board of Directors.
• The Demand Letter requests an extraordinary shareholder meeting to vote on two key proposals: (i) amending Perion's Articles of Association to allow a simple majority shareholder vote to cancel any rights plan and require future rights plans to be shareholder-approved by a simple majority, and (ii) subject to the first approval, to cancel the Rights Plan adopted by Perion's Board on April 3, 2025.
• Phoenix Financial acquired these securities for investment purposes and is considering further actions to prevent the implementation or compel the withdrawal of the Rights Plan.

Sentiment

Score: 3

Explanation: The sentiment is negative from the perspective of the reporting person towards Perion Network's current corporate governance. Phoenix Financial is actively challenging the Board's decision to implement a Rights Plan, alleging severe damages to shareholders, breaches of reporting obligations, and violations of law. This indicates a contentious relationship and dissatisfaction with current management actions.

Negatives

• Perion Network's Board of Directors adopted a Rights Plan on April 3, 2025, without shareholder approval.
• Phoenix Financial views the Board's conduct regarding the Rights Plan with "great severity."
• Concerns about "severe damages" to shareholders if the Rights Plan leads to delisting from the Tel Aviv Stock Exchange.
• Allegations of "severe breach of the Company's reporting obligations" related to the Rights Plan.
• Claims of "serious violation of the law" regarding corporate actions taken by Perion following preliminary Israeli Securities Authority approval in June 2024.

Risks

• Potential delisting of Perion Network's shares from the Tel Aviv Stock Exchange if the Rights Plan is activated.
• Risk of ongoing corporate governance disputes between significant shareholders (Phoenix Financial, VBF LP) and Perion's Board of Directors.
• Potential for legal challenges or administrative proceedings related to alleged breaches of reporting obligations and violations of law by Perion's Board.

Future Outlook

Phoenix Financial intends to continue reviewing its investment in Perion Network Ltd. and may acquire additional securities, retain, or sell existing holdings. It plans to engage in discussions with Perion's management, Board of Directors, and other securityholders to encourage or cause material changes related to corporate governance, business, or corporate structure, potentially retaining consultants and advisors for these considerations.

Management Comments

• "Phoenix Financial and VBF LP have independently concluded that it is in each such shareholder's interest to request a Shareholders Meeting."
• "The Reporting Person is considering taking one or more additional actions to convince the Company to withdraw the Rights Plan, to otherwise subject it to a shareholders' vote or to prevent its implementation, including but not limited to discussions with management, the Board of Directors of the Company, other securityholders of the Issuer and other relevant parties."
• "The Reporting Person acquired the securities described in this Schedule 13D for investment purposes and intends to review its investments in the Issuer on a continuing basis."
• "Our clients view the conduct of the Company's Board of Directors with great severity, and nothing in this letter, or the absence thereof, shall derogate from or prejudice our clients rights."
• "This includes, but is not limited to, our clients claims regarding the adoption of a rights plan by the Company while disregarding the severe damages that would be caused to the Company's shareholders as a result of the delisting of the Company's shares from trading on the Tel Aviv Stock Exchange, if and to the extent the plan is activated; claims regarding a severe breach of the Company's reporting obligations in connection therewith; and claims regarding corporate actions taken by the Company following the approval of its preliminary approach to the Israeli Securities Authority in June 2024, while in serious violation of the law."

Industry Context

This filing represents a significant instance of shareholder activism, where institutional investors are directly challenging a company's board on a corporate governance matter, specifically the adoption of a "poison pill" or rights plan. Such actions are common when shareholders believe management is acting against their best interests, particularly concerning control-related mechanisms. The mention of potential delisting from the Tel Aviv Stock Exchange highlights the cross-border regulatory and market implications for companies listed on multiple exchanges.

Corporate Governance

Legal Proceedings

• The Demand Letter itself is a formal step that could precede legal action if Perion's Board does not comply.
• Phoenix Financial's statement about "claims regarding a severe breach of the Company's reporting obligations" and "claims regarding corporate actions... while in serious violation of the law" suggests potential future legal or regulatory proceedings.

Stakeholder Impact

• Shareholders: Potential for increased shareholder power over corporate governance decisions, particularly regarding anti-takeover measures like rights plans. Risk of share price volatility due to corporate governance disputes. Potential for "severe damages" including delisting from the Tel Aviv Stock Exchange if the Rights Plan is activated.
• Management/Board: Increased scrutiny and pressure from significant shareholders. Potential for changes in corporate strategy or governance structure if Phoenix Financial's demands are met.
• Regulators (SEC, Israeli Securities Authority): Potential for regulatory review or action based on allegations of reporting breaches and legal violations.

Next Steps

• Perion Network Ltd. is required to convene an extraordinary meeting of shareholders immediately and without delay.
• Phoenix Financial Ltd. is considering additional actions to convince Perion to withdraw the Rights Plan, subject it to a shareholder vote, or prevent its implementation.
• Phoenix Financial may engage in further discussions with Perion's management, Board of Directors, other securityholders, and relevant parties.
• Phoenix Financial may acquire additional Perion securities or sell existing holdings based on ongoing evaluation of the Issuer's business, financial condition, and market conditions.
• Phoenix Financial may retain consultants and advisors to facilitate consideration of corporate governance matters or changes to Perion's business/corporate structure.

Key Dates

Recommendation

Keywords

Perion Network Ltd., Phoenix Financial Ltd., Schedule 13D, Shareholder Activism, Corporate Governance, Rights Plan, Poison Pill, Extraordinary Shareholder Meeting, Israeli Companies Law, SEC Filing, Investment Management, Phoenix Insurance Company Ltd., Value Base Fund Limited Partnership