TCT Magazine
Stratasys has announced that its Board of Directors, after consultation with its independent financial and legal advisors, has unanimously determined that the revised partial tender offer announced by Nano Dimension on July 18, to acquire ordinary shares of Stratasys for 25.00 USD per share, is “misleading, illusory” and continues to “undervalue the company as a whole and is not in the best interests of all Stratasys shareholders”.
Stratasys addressed its shareholders in the announcement, reminding them of “facts” in relation to the Nano Dimension partial tender offer:
- Partial tender offers by nature can be extremely misleading and value-destructive to shareholders, and Nano’s partial tender means Stratasys shareholders who tender their shares may have as few as approximately 40% of their shares purchased, assuming full participation in the offer. Therefore, shareholders risk becoming a minority shareholder in a Nano-controlled company by tendering into Nano’s partial tender offer.
- The partial tender offer implies a blended value of approximately $16 to $19 per share or less1, assuming full participation in the offer, given that Stratasys being controlled by Nano is likely to lead to Stratasys shareholders’ remaining shares trading at a heavily discounted level, which could be approximately $9 to $15 per share or less2.
- Nano has a track record of value destruction and trades at negative firm value under Nano CEO Yoav Stern’s leadership. In addition to Yoav Stern’s misleading claims about Stratasys, he is not qualified to manage Stratasys. Since Yoav Stern’s appointment, Nano has spent more than $500 million in cash and increased itsrevenue by only $44 million.
- If the partial tender offer is successful, Nano and Yoav Stern may not be incentivized to act in the best interest of minority shareholders of Stratasys, and Nano could block any future transaction that might maximize value for Stratasys and its minority shareholders.
Stratasys says it has received feedback from “many shareholders and brokers” that the “unfair, coercive offer process” constructed by Nano Dimension, makes it “difficult and confusing” for shareholders that own Stratasys shares beneficially to file a notice of objection against the tender offer.
Stratasys says it has informed Nano Dimension, its tender offer agents, and the Israeli courts that the process must be fixed so that it is equally as accessible and easy for a beneficial owner of Stratasys shares to file a notice of objection as it is to tender shares into the partial tender offer.
Stratasys has again commented on the slate of nominees to its board from Nano Dimension, which is set to be voted on at the upcoming Annual General Meeting (AGM) on August 8, 2023. Stratasys says that Nano has nominated an “unqualified slate of director candidates” as part of its “campaign to acquire control of Stratasys”. Stratasys claims that the slate has presided over serious corporate governance failings and value destruction.
Stratasys says that its own slate of director candidates is “highly qualified, truly independent and purpose-built”. The company also says that its board is highly focused on “maximising shareholder value” and engages with multiple industry participants for the benefit of “all Stratasys shareholders”.
On July 18, Nano Dimension released a statement addressing Stratasys shareholders, which can be found here.
Read more:
Nano Dimension increases Stratasys offer to $25 per share & says 3D Systems proposal is “misleading”
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
Stratasys has also released a statement on the legality of its shareholder rights plan, which was issued by the company in July 2022, in response to a full evidentiary hearing in the District Court in Tel Aviv, Israel. The hearing took place to address the legal action in which Nano Dimension challenged the Stratasys shareholder rights plan as illegal. Stratasys says the court issued a decision in which the judge provide an indication of his preliminary views on the Nano claim.
Stratasys says the purpose of the judge providing his preliminary views was to allow the parties a “measure of certainty” so they can choose the next steps in both the legal and business arena. Stratasys claims that the judge indicated that a shareholder rights plan is legal under Israeli law.
The judge also indicated, according to Stratasys, that the board’s consideration in adopting a shareholder rights plan would be subject to “enhanced scrutiny”. The company also says that the judge indicated where the board acted in “good faith”, after having informed itself and consulting with experts, “all for the benefit of the shareholders and the company”, the board’s business judgement would be legitimate.
According to Stratasys, the judge provided a list of examples for considerations a board might consider, including:
- concern that the offeror is a company torn by internal disputes,
- concern that the offeror is a company traded at a significant discount, which may indicate the market's lack of confidence in its management,
- concern that previous companies acquired by the offeror have had their value written off,
- concern that a partial tender offer may leave shareholders stranded with a new controlling shareholder whose control premium would come at their expense, and
- where the board believes that the SRP may allow the emergence of a superior transaction(whether a tender offer at a higher price, or merger transactions) that the board believes are more beneficial to the company and its shareholders, and which open up collaborations and market opportunities for the company, greater interest for investors, or the creation of more employment, all creating value for the company.
Stratasys says the judge set a schedule for submission of summations to be completed by September 14, 2023, and that it anticipates a decision on this matter to not be available until late September or early October 2023.
The Stratasys shareholder rights plan, which was initially issued in July 2022 after Nano Dimension increased its stake in the company to 14.1%, was amended with the announcement of Stratasys’ proposed combination with Desktop Metal.
Stratasys says the expiration date has been amended to the later of July 24, 2023, and the conclusion of the “extraordinary general meeting of Stratasys shareholders” for the purpose of seeking approval of the shareholders of the transaction contemplated by the merger agreement, or such time as the merger agreement has been terminated in accordance with these terms.
Stratasys says the extension of the shareholder rights plan is intended to ensure that all shareholders have a meaningful opportunity to vote on the approval of the transaction and preserve for all shareholders the “long-term value” of the company in “the event of a takeover or acquisition of a controlling stake without the payment of a control premium”.
Stratasys says the rights plan will not prevent any person from making a superior proposal pursuant to the terms of the merger agreement.
