The plot thickens in the curious proposed acquisition of Stratasys by Nano Dimension.
Today, one of Nano Dimension’s key shareholders, Anson Funds of Toronto, issued a damning press release urging the company to withdraw their acquisition proposal to Stratasys.
As I reported earlier, the matter revolves around the near US$1B in cash that’s currently held by Nano Dimension. It seems that Anson Funds, as well as multiple other shareholders and analysts believes this cash should be given back to shareholders. That’s because they don’t believe Nano Dimension requires this cash to proceed with normal operations.
Instead, and apparently against the will of many shareholders, Nano Dimension’s board of directors has embarked on an acquisition strategy.
Anson Funds explained their concerns:
“Our primary and immediate concern is that the Company is utilizing most of its cash resources for a contemplated unsolicited takeover of Stratasys. Anson does not support this transaction in light of the ongoing proxy contest. It is apparent that the Board is acting unilaterally against the will of the Company’s shareholders, entrenching themselves and working to prevent a shareholder vote. It is not surprising that Nano Dimension is attempting to structure this potential acquisition in a way that would circumvent the need to seek out shareholder approval prior to consummating a transaction. Given the Company’s poor track record, we believe the best course of action is to return cash to shareholders, not to pursue large-scale M&A.”
It’s startling to see a major shareholder saying such things about their investment. Anson Funds describes the move as “value destroying mergers and acquisitions”.
It gets worse:
“We have urged the Company on multiple occasions to implement a meaningful return of capital program in order to preserve and enhance shareholder value. However, management has repeatedly ignored our requests and instead has continued to erode its valuable working capital position. Discussions recently broke down after we communicated our view that the Company would best serve its shareholders by aggressively utilizing its share buyback program and meaningfully expanding its efforts to return capital to shareholders. Management rebuffed this request and informed us that ‘[they] control the company’, not us, the actual shareholders.”
“We believe that it is precisely this level of arrogance from management that causes Nano Dimension to trade at a staggering and persistent 31% discount to its cash and investments balance. It is clear to us that other market participants have also lost faith in management’s ability to create or enhance shareholder value. Management’s focus on self-interest is concerning.”
Anson Funds, and apparently many other Nano Dimension investors, believe the existing management team at Nano Dimension is pursuing their own agenda and they fear the company’s value is being destroyed.
Another implication of the move, should it go forward, is that the resulting share structure in the merged entity could further dilute the control of existing shareholders, including Anson Funds. That suggests the move could be a way for the Nano Dimension board to solidify their positions.
Given this latest information, the bizarre nature of the acquisition proposal, and the ongoing corporate antics at the company, it’s becoming pretty clear that something is deeply amiss at Nano Dimension.
Sentiment regarding the proposal is beginning to emerge today, and it appears to be almost universally negative, strongly suggesting that the deal will not proceed.
I can’t see how the existing Nano Dimension management team could operate Stratasys in a positive way, given the series of strange moves and Anson Funds’ conclusion of a “poor track record”.
As someone that has for many years tried to help push the 3D print industry forward, I can’t see how this proposed acquisition would help push adoption of additive manufacturing forward.
Meanwhile, Stratasys has acknowledged receipt of the offer, and pledged to respond.
I know what I would say.
Via Yahoo Finance