The next installment of the battle for Stratasys between Nano Dimension and 3D Systems has reached a breakthrough. Yesterday, 3D Systems announced the date of the expected completion of the due diligence process and talks on the merger agreement with Stratasys, and Stratasys presented the opinions of independent advisory firms, which strongly advise against the company’s shareholders voting on replacing the management with an entirely Nano Dimension company. Today, Nano Dimension announced that due to the strategy introduced by Stratasys, the so-called. “poisoned pill” withdraws from the attempt to take it over and withdraws its last offer – extremely attractive for the shareholders of this company. Finally, at 18:00 our time, Stratasys issued a statement that talks with 3D Systems are not going as smoothly as it was presented and whether the merger offer will be accepted remains to be seen …?
For those who follow this story on a regular basis, I just remind you: on August 8, 2023, a vote of confidence in the current Stratasys authorities was to take place – and in the event of not receiving it, the adoption of a new supervisory board consisting entirely of people related to Nano dimensions. At the same time, Stratasys began to seriously consider an offer from 3D Systems that, if accepted, would not only merge the two companies into one organization, but also prevent the Desktop Metal takeover (which would have been left in the proverbial ice).
So much for the reminder – now let’s move on to current affairs…
Yesterday, 3D Systems announced that on August 4, the due diligence process, as well as negotiations on the merger agreement with Stratasys, are to be completed. As a consequence, after this date, Stratasys will be able to terminate the contract with Desktop Metal (for which 3D Systems will pay a contractual penalty) and sign a contract with them, merging into one big company. 3D Systems also said the July 13 offer is the “best and final proposition” – each Stratasys share will be converted to $7.50 in cash and 1.5444 shares of the combined company. This translates into approximately $2 billion.
It would seem, therefore, that the matter between the companies is already settled … Well, let’s wait …
Shortly after the above statement, Stratasys released its (another…) statement regarding the conflict with Nano Dimension. It included opinions issued by two independent consulting firms – Institutional Shareholder Services (ISS) and Glass Lewis & Co. (Glass Lewis), which recommend that the company’s shareholders vote for the re-election of current board members and oppose the election of candidates from Nano Dimension.
In response to this, Nano Dimension unexpectedly withdrew its offer at all!
The company announced today that it will cease further efforts to acquire Stratasys, withdraw its $25-a-share offer, and will not attempt to replace its board of directors. According to the company, the “poison pill” strategy implemented by Stratasys last year will block Nano Dimension from finalizing its offer to shareholders.
One of the conditions for closing the special tender for shares was the purchase or termination of the poison pill. Nano Dimension stated that “Stratasys management continues to strengthen itself and refuses to remove or discontinue the poison pill, thereby depriving Stratasys shareholders of the ability to decide the best development path.”
The company also stated that it no longer considers it reasonable to continue electing its candidates to the Stratasys board of directors and is withdrawing them. She added that the decision to nominate new directors was directly related to her efforts to buy back a poison pill to “clear the way” for Stratasys shareholders.
So this is the end of the battle – and perhaps the war…
But this is not the end … Today at 18:00 our time, Stratasys issued another statement – this time commenting on yesterday’s statement by 3D Systems that the parties are heading to an agreement. Well, not necessarily … Stratasys claims that 3D Systems does not want to reveal all its cards to it:
Contrary to 3D Systems’ statements in the press release regarding the exchange of due diligence materials (…) Stratasys quickly proceeded to provide the data requested by 3D Systems for review and has already held management meetings. On the other hand, we have repeatedly asked 3D Systems to provide the same information from their company, as well as to assess potential negative revenue synergies. While 3D Systems has provided some cost synergy analysis, it is only at a high level and lacks critical details (…) Despite the implication in the 3D Systems press release that they have engaged in a partnership, we are still waiting to hear all this information from 3D Systems. In a transaction where the majority of the proposed payment for the merger is in the form of 3D Systems share capital, Stratasys management must understand these key details to make a responsible and informed decision.
The company also resents the other side that the offer they are working on suddenly turned out to be “the best and final” …
Stratasys also notes that 3D Systems added for the first time that their July 13, 2023 public proposal is also their “best and final proposal.” 3D Systems does not say whether this was the case on July 13, 2023 [and] if, when and why their thinking about negotiations changed. Notwithstanding 3D Systems’ changing statements and tactics, Stratasys management will evaluate any proposal holistically, taking into account necessary due diligence and analysis, including regulatory analysis. If 3D Systems is serious about merging with Stratasys, the way forward is through collaboration and transparency, not distorted public statements.
Stratasys also maintains that he still really likes the combination with Desktop Metal:
Once 3D Systems has provided the required information (…), the management of Stratasys expects to be able to decide whether the proposal of July 13, 2023 or any other revised and improved proposal submitted by 3D Systems is a better proposal (…) than a merger with Desktop Metal. (…) The Management Board of Stratasys did not change its unanimous approval, recommendation and declaration of advisability of the transaction with Desktop Metal. Stratasys will continue to comply with all terms and conditions of the Desktop Metal merger agreement.
So yeah…
Nano Dimension has been a success so far, but knowing the ardor of the president of this company – Yoav Stern, you can expect that he will soon surprise us with a new idea. As for the talks between 3D Systems and Stratasys, they seem quite difficult at the moment. The fact is, however, that something that seemed absolutely impossible just a month ago may become a reality at any moment.
Source: www.3dsystems.com & www.stratasys.com & www.nano-di.com & www.stratasys.com
Photo: www.pixabay.com