TCT Magazine
Nano Dimension has issued a statement detailing an increase to its special tender offer price to Stratasys shareholders. The offer has been increased to $25 per share, which the company says represents a 233% premium over the cash portion of the 3D Systems offer, and a 93% premium over Stratasys’ share price.
Nano Dimension claims that its offer highlights a clear path to “maximising value” for Stratasys shareholders.
Nano Dimension has said that if its tender offer does not close, it intends to review its investment in Stratasys, including a possible sale of all of its 14.1% holdings in Stratasys in the open market. The company has said that the part of 3D Systems’ proposal made up of newly issued shares of the combined company, worth 14.50 USD according to Nano, are “volatile shares” and “not a realisable number”.
Nano Dimension says that as the largest shareholder of Stratasys, it believes the stated value of the latest 3D Systems offer is “misleading” by using an “inflated and unsustainable 3D System’s share price”. Nano claims that, using historical prices, the 3D System’s proposal is worth “barely” 22 USD per share, 7.50 USD of which is cash.
Nano believes that its offer provides “guaranteed cash value and more certainty” than any alternative, with “ample cash” on hand.
Following the potential completion of its special tender offer, Nano Dimension says it intends to explore “strategic industry consolidation”, including, a potential combination of Stratasys with 3D Systems based on a full and fair transaction, or will seek to own 100% of Stratasys as soon as “practical and permissible” by U.S. and Israeli law.
Nano Dimension says that completing a transaction for all of Stratasys is a step in Nano’s broader industry consolidation strategy, focused on profitability and cash generation to drive value for all shareholders.
The expiration date of the special tender offer has also been extended to 5pm New York time (EDT) On July 31, 2023.
Nano says that as well as delivering “233% more cash” to Stratasys shareholders in the near term than any currently available alternative, it’s deal also preserves the ability to generate future value creation through strategic merger and acquisition opportunities.
The company also claims that in addition to the price representing a 93% premium to the unaffected 60-day average share price of Stratasys, the offer represents a “significant premium” to “all relevant” Stratasys historical trading levels. The company believes that its offer is the most compelling for Stratasys shareholders and is the “only alternative available” that provides “certain, near-term”, cash value at a “significant premium” and the quickest path for Stratasys shareholders to realise value.
Successful completion of the tender offer would increase Nano Dimension ownership in Stratasys to between 46% and 51% of the outstanding ordinary shares, inclusive of the approximately 14.1% of Stratasys’ outstanding ordinary shares currently owned by Nano.
Read more:
Stratasys to enter discussions with 3D Systems despite Desktop Metal merger agreement
3D Systems submits third Stratasys takeover offer, worth $2 billion
Nano Dimension submits new Stratasys offer of $24 per share in cash; Stratasys to review
Interview: Stratasys CEO Yoav Zeif details the strategy behind Desktop Metal merger
Stratasys and Desktop Metal to merge in deal worth $1.8 billion
Nano Dimension has also announced that the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR), in connection with its proposed special tender offer of Stratasys has expired and “no further regulatory review” by U.S. antitrust authorities is required in connection with the offer.
Nano Dimension says it believes the current terms of the deal offered by 3D Systems are “misleading”, not in the best interests of Stratasys shareholders and present “significant share price uncertainty” and transaction closing risk, as well as being “inflated” by an “unsustainable” 3D Systems share price.
On a 30, 60, 90, and 180-day VWAP basis, 3D Systems’ offer is worth “barely $22 per share” according to Nano. Nano also claims that since the submission of the latest offer from 3D Systems, its share price has declined 6%. Nano says this highlights the “significant value uncertainty” of the majority stock consideration of 3D Systems’ offer.
Nano Dimension says that a 14.50 USD value of 3D Systems shares in the company’s July 13 offer to Stratasys is “not necessarily” a realistic value, and listed the following points as its reasoning:
- Since the price of 3D Systems’ shares may sink before, during and long after the 3D/Stratasys transaction, as a result of the huge expected dilution (doubling the amount of 3D Systems shares in order to acquire Stratasys), as described below:
- 3D Systems’ offer will nearly fully deplete its cash position and the combined company will need to raise capital promptly (as indicated by 3D Systems’ recent shelf registration filing). The capital will likely be raised at a share price discount, which will create additional pressure on 3D Systems’ stock price and result in further dilution and value destruction to 3D Systems and Stratasys shareholders.
- 3D Systems’ offer has execution risk as it will require shareholder votes from both companies and regulatory review.
Nano Dimension also says that as the largest shareholder of Stratasys, it opposes the proposed Stratasys combination with Desktop Metal, which it says is highly dilutive and “greatly overvalues” Desktop Metal’s “cash burning” business.
Nano Dimension says that based on information by Computershare Trust Company, N.A., the depositary for the tender offer, as of 5:00pm New York time on July 17, 2023, 4,100,607 Stratasys shares had been validly tendered and not properly withdrawn pursuant to the offer. This represents around 6% of the total shares of Stratasys.
