An influential consulting company opposes the merger of Stratasys with Desktop Metal, claiming that 3D Systems’ offer is better

Reuters news agency reported that ISS (Institutional Shareholder Services), an influential proxy advisory firm, recommended Stratasys shareholders reject the proposed merger with Desktop Metal, saying that 3D Systems’ offer presented a “more compelling path to value creation.” The ISS recommendation, which Reuters said is typically of “significant importance” to shareholders, came just over a week before the extraordinary general meeting of shareholders of both companies, during which a vote on the merger will take place.

The ISS report sent to Stratasys shareholders is unambiguously titled: “Vote No Takeover at SSYS Meeting.” As reported by Reuters, ISS claims that it is unclear whether the merger of Stratasys and Desktop Metal brings value to shareholders? He also says that the latest counteroffer made by 3D Systems is more valuable. ISS further stated that as the stock prices of Stratasys, Desktop Metal and 3D Systems have declined over the past 12 months, 3D Systems’ cash and stock offer provides important protection against further declines.

Stratasys representatives have not yet responded to Reuters’ request for comment.

The Stratasys merger with Desktop Metal was announced on May 25, 2023, creating a proposed combined company valued at $1.8 billion. 3D Systems’ last offer to Stratasys on September 6 offered a price of $7 per share in cash and ownership of 46% of the combined company’s total stock. 3D Systems believes this latest offering will be worth $27 per share to Stratasys shareholders, after factoring in synergies. This would mean the deal would be worth approximately $1.87 billion.

However, Stratasys decided that 3D Systems’ offer did not bring anything new to the previously conducted talks and finally ended the talks. At the same time, the company extensively pointed out – in its opinion – numerous weaknesses and risks related to this merger.

UPDATE!

Shortly after the publication of this article, information appeared that the same consulting company, ISS, recommended that Desktop Metal shareholders vote in favor of accepting the merger offer with Stratasys. Although this may seem illogical at first glance, from the point of view of individual shareholders of each company it makes perfect sense. According to ISS:

• Stratasys merging with Desktop Metal will be worse than merging with 3D Systems
• Desktop Metal merging with Stratasys will be better than continuing to operate independently.

These recommendations confirm most of the allegations made by 3D Systems – and previously Nano Dimension – that the merger of Stratasys with Desktop Metal is “one-way” and represents much greater value for the acquired company.

Source: www.reuters.com via www.tctmagazine.com