TCT Magazine
Nano Dimension has released multiple statements addressing the shareholders of Stratasys, and expanding on its intentions for changes to the Stratasys Board of Directors. The company has also commented on a statement from Stratasys that addressed the legality of its shareholder rights plan. Nano also issued its own shareholder rights plan, in part of its own power struggle in January 2023.
Nano Dimension says it is acting “with urgency” to initiate the replacement of Stratasys’ directors in the interest of “all shareholders”. Nano says that as a result of this, it nominated its seven “highly qualified” directors with “extensive track records” of value creation.
Nano, as it has stated previously, has nominated directors that have previously served as CEOs or in “C-suite” positions, through which they have created “demonstratable increases” in long-term shareholder value. Stratasys had recently referred to the nominees as “unqualified” and claimed that Nano’s campaign is “self-serving”.
Nano Dimension said in a statement addressing Stratasys shareholders on July 18: “The Stratasys Board of Directors (the “Board”) have checkered personal backgrounds as well as a warped command of corporate governance. The Stratasys Board has lined their own pockets while overseeing poor performance, indulging themselves with exorbitant salaries and annual equity grants, cumulatively equalling approximately $1,820,000 in FY 2022 for 8 directors, not including meeting fees, (for approximately 10-20 meetings per annum), and travel & entertainment expense.”
The full July 18 statement from Nano Dimension, which Nano says is “reminding Stratasys shareholders of the performance of directors” on the Stratasys board can be read here.
Nano Dimension says it had asked the court to allow Stratasys shareholders to “pick and choose” nominees from across both companies, and claims that Stratasys “has chosen to take that option away" from its shareholders”, forcing the shareholders to select a full slate.
Nano says it recognises that the Board of Stratasys should be comprised of a majority of independent directors, and following a “successful replacement” of the current Stratasys directors with the nominees from Nano, it intends to take steps to appoint independent directors to represent the shareholders’ interests for the long term.
Nano says that its director nominees are intended as an interim but “urgently needed solution to prevent further value destruction by the current Stratasys board.” The full list of Nano nominees can be found here.
In regards to the July 19 statement from Stratasys, addressing the legality of its shareholder rights plan, Nano Dimension has referred to the statement as “misleading”, and says it “deceives shareholders” by quoting a “respectable judge in a totally out-of-context and wrong manner”.
Nano Dimension said that “this exaggeration happened before”, and alludes to a court case taking place in the US, which it doesn’t give the details of , where it claims a judge said that under former CEO David Reis, Stratasys used “hyperbole and exaggeration, mere puffery, vague and obvious hyperbole” and referred to Stratasys’ statements as “vague and unreliable”.
Nano says the history of “misleading disclosures” from Stratasys raises “serious questions” about Stratasys’ present statements, as the same executives accountable for “misleading shareholders” are still directors at the helm.
Nano Dimension includes in its statement what it says are direct quotes from the Israeli Court Judge, interim document, from July 18, translated to English:
“…. I emphasize that my position here… is without fixing rivets and when my opinion is not fixed one way or the other in a way that should be cast on the final decision in the claims...[which will occur only]… after re-reading all the pleadings, the opinions, the evidence and the summaries of the parties
Anything I have said above is in generalities, and is disconnected from the rights plan that is in the proceeding in front of me… Does the Israeli Law needs poison pill”? This is a question that needs scrutiny, including, by the way, an analysis of its purpose, and checking other alternatives that the law proposes...I am aware of the fact that he plaintiff [Nano Dimension] attacks in other ways the legality of the rights plan and I do not express my opinion on this matter at this stage……I would also like to clarify... at this stage:
- that a court will be naturally suspicious of a company's board of directors of a company without a controlling shareholder [STRATASYS].
- which opposes a 'hostile' takeover bid and wants to instill ashare rights plan of the “poison pill" type. In a situation like this, it seems that the …
- burden of persuasion and is on the board of directors to prove that it is acting for the best interests of the shareholders and for the best interestss of the company.
- The court’s examination will be checking what the information was before the board of directors, whether it acted to obtain all the necessary information, consult with experts in the field, exercise proper business judgment.
- …when the best interests of the shareholders and the best interests of the company before his eyes, and in that order.
- It seems that the tendency will be to examine not only the due process of making the decision.
- The starting point is "suspicion" towards the board of directorsthat is “holding to its entrenched horns” of the company’s management,
- …after it was granted "belligerent" authority in the form of the ability to activate a poison pill. Hence, I think that tests from the domains of good faith and fiduaciary duties should be used in …
- …examining a decision of the board of directors and its motives should scrutinize, testing if it has acted in the best interest of the shareholders and the company and in this order, in rejecting the tender offer proposal and activating the poison pill…”
Nano Dimension ended the statement by saying that Stratasys shareholders “cannot rely” on the accuracy and reliability of news releases, announcements, and presentations from the Stratasys board.
