TCT Magazine
Stratasys has issued a statement regarding a ruling made by an Israeli court in the ongoing litigation between Nano Dimension and its largest shareholder, Murchinson Ltd.
The company says that its shareholders should understand that the Israeli court “explicitly” calls into question whether substantial decisions that are being made by a Nano Board of Directors are in the best interest of shareholders.
Stratasys has rejected three takeover offers from Nano Dimension in 2023: the first being worth 18.00 USD per share, which comes to 1.1 billion USD in total; a second worth 19.55 USD per share, coming to 1.2 billion USD in total; and a third offer of 20.05 USD, worth 1.22 billion USD in total. A special tender offer was also announced by Nano Dimension prior to the third offer being rejected.
The litigation concerns the dispute between Murchinson and Nano regarding the validity of the Special General Meeting of Nano shareholders, which was called by Murchinson in March 2023. According to Murchinson, the meeting saw 92% of the votes cast supported Murchinson’s proposal to remove four directors from the Nano board, including Yoav Stern, Chief Executive Officer and Chairman of Nano Dimension.
On April 16 2023, the Israeli court issued its decision on Murchinson’s motion for temporary relief and held that Murchinson would be allowed to appoint two directors to the Nano board as observers, until a final decision on the case is made.
Stratasys’ statement said: “Nano clearly disagrees with the court’s recent ruling, as evidenced by the fact that it has stated its intention to appeal the decision to the Israeli Supreme Court. Despite the ruling, Nano, led by a Board and management team whose legality and authority remain in doubt, has continued to pursue what Stratasys believes to be an illegitimate campaign to acquire the company.”
Read more:
- Explained: The power struggle at Nano Dimension
- Explained: Why Nano Dimension has invested in Stratasys
- Nano Dimension hires Lazard Ltd to advise on potential mergers and acquisitions
The decision from the court noted: “…[the court] has to consider the conduct of the company until the decision in the main proceedings with a board composition whose legality is in doubt and more importantly, with a board composition that even if legal…, it is doubtful if the shareholders trust this board composition and the decisions it makes. It was apparent that the company is in no hurry to get a decision on the legality of the special shareholders’ meeting…, even though at the same time substantial decisions are being made at the company and even though there is prima facie doubt whether these decisions are being made by management that is acceptable to the shareholders.”
In a press release distributed after the court ruling, Nano Dimension said: “This decision confirms that the board of directors has full legitimacy to transact with Stratasys, in contrast to what was stated in the Stratasys press releases concerning the Company’s indicative offers to buy the Stratasys shares.”
Stratasys says that this statement from Nano Dimension is inconsistent with the court’s ruling. The company said: “Based on the court’s ruling, the authority of Nano’s Board and management team to potentially launch and consummate with finality a special tender offer for Stratasys shares remains in doubt and continues to be subject to adjudication in the Israeli courts.”
Stratasys also added in its statement: “Furthermore, it is important to note that in Nano’s April 17, 2023 press release, Nano intentionally omitted the key fact that the court-ordered temporary observers are to be Murchinson’s dissident director candidates, Ken Traub and Joshua Rosenweig.”
Stratasys says its board continues to believe that Nano’s “campaign” against Stratasys is of questionable legal authority and credibility, and poses “significant risk” to Stratasys and its shareholders.
Nano Dimension released a statement of its own the following day, claiming: "Stratasys new release misleads their shareholders."
Nano says that the court ruled that its board has "full authority" to proceed with the Stratasys transaction, that Stratasys is "depriving" its shareholders of immediate and guaranteed cash return, and that Nano is committed to consummate a transaction with Stratasys.
Nano said: "It is disappointing that Stratasys has resorted to sowing misinformation and falsehoods in its rebuff of Nano Dimension's acquisition offer that would provide immediate and certain cash payment at a compelling premium to share price to Stratasys shareholders."
Further on in the statement, Nano added: "These claims are nothing more than a desperate attempt to mask the Board's clear entrenchment and efforts to mislead shareholders. The facts speak for themselves."
In the statement, Nano claimed: "The facts speak for themselves" and highlighted three points:
- "The Israeli court’s ruling vindicated Nano Dimension’s position that its Board of Directors has the full authority to continue to lead and govern the Company as they have been, including as it relates to Nano Dimension’s proposed acquisition of Stratasys."
- "Clearly the Stratasys' board members are trying to exploit the court decision in order to interfere with the Company's intention to initiate a Special Tender Offer to the shareholders of Stratasys in order to preserve their position as board members. In its ruling from April 16th, 2023, the district court in Lod, Israel, rejected Murchinson’s motion and stated explicitly that Murchinson’s motion “whereby the Company will not be allowed to take any action that is not in the ordinary course of business… will harm the Company in an excessive way” and explicitly mentioned the completion of the Stratasys transaction as an example where such a restriction cannot be accepted."
- "The Company has a clear and full authority to take actions that are not in the ordinary course of business including the Stratasys transaction and any claim made to the contrary by Stratasys is false and misleading."
Nano also commented on "ILIGAL ACTIONS" by Murchinson and Anson, saying that it intends to appeal against the appointment of the two Murchinson observers to the Nano Dimension board, and that the shareholder meeting held by the two companies was "invalid" and the results of it demonstrate a "lack of interest" in their arena from the Nano Dimension board.
The statement was concluded by saying: "It's time to allow Stratasys shareholders to have their say," as well as commenting on its intention to continue proceeding towards acquiring Stratasys as it prepares the previously announced all-cash special tender offer of 18.00 USD per share, which it says would allow Stratasys shareholders to "choose for themselves and receive a significant and immediate premium for their shares."
