The shareholders of Rehovot-based 3D printer company Stratasys (Nasdaq: SSYS) voted today against the company’s proposal for a merger with US company Desktop Metal, Inc. (NYSE: DM) in an all-stock deal. Two consulting companies that advise financial institutions, ISS (Institutional Shareholder Services) and Glass, Lewis & Co., recommended voting against the deal.
At the same time, the Stratasys board of directors extended the validity of Stratasys’s "poison pill" for three months. Stratasys will thus be able to make a strategic assessment of the current situation: the acquisition offer from 3D Systems (NYSE: DDD), possible bids from other companies, and other courses of action and opportunities that it has been prevented from considering because of its commitment to Desktop Metal. Stratasys announced the merger with Desktop Metal six months ago, and at the time the companies estimated that it would create a combined company with a market cap of $1.8 billion.
Stratasys will not have to pay a penalty to Desktop Metal, but it will cover certain of the latter’s costs.
Another Israeli 3D printer company, Nano Dimension (Nasdaq: NNDM), which bought Stratasys shares on the open market to the tune of $178 million and is currently the largest shareholder in the company, attempted to take it over, but ultimately gave up, while a bid made by 3D Systems a few months ago is still on the table.
As a defense against hostile takeover bids, Stratasys adopted a "poison pill" tactic whereby if any shareholder reaches a holding of 15% of its shares, all the other shareholders will be able to buy one more share for each share they hold for just $0.01.
"We have decided to undertake a comprehensive and thorough review of all available strategic alternatives," said Stratasys chairperson Dov Ofer. "We are entering this review as the leader in the additive manufacturing space and will continue to execute our strategy, powered by innovation and profitable growth, which has led Stratasys to outpace the competition. Importantly, we remain focused on our mission to deliver value to customers and are committed to taking the appropriate actions to maximize value for all Stratasys shareholders."
In morning trading in New York, Stratasys shares are up 7.51% at $13.17, giving the company a market cap of $912 million.
Published by Globes, Israel business news - en.globes.co.il - on September 28, 2023.
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