Stratasys has promptly rejected Nano Dimension’s latest takeover proposal.
Nano Dimension had upped their previous offer to US$19.55 per share, which could be the maximum amount possible by the company. That’s because their cash reserve is about equal to the total amount at that share price.
Nano Dimension’s initial offer was also rejected by Stratasys, in a unanimous vote by the Stratasys board of directors. That offer was slammed by analysts, as well. Similarly, this offer has also been rejected unanimously.
In a statement released over the weekend, Stratasys said:
“Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisors, the Stratasys Board of Directors carefully reviewed and evaluated the revised proposal. Following its review, the Stratasys Board concluded that Nano’s proposal continues to substantially undervalue Stratasys in light of its standalone prospects and is not in the best interests of Stratasys and its shareholders. The Stratasys Board and management team are confident that Stratasys’ standalone plan will create significantly greater value for its shareholders than the Nano proposal.”
But the Stratasys statement didn’t stop there.
The press release continued to state Stratasys’ position on several statements made by Nano Dimension CEO Yoav Stern. Stern has been making highly unorthodox daily YouTube videos apparently intended at persuading viewers that the Nano Dimension proposal is a good idea.
In the videos, Stern often makes accusatory statements about Stratasys’ management, strategy and public statements. It’s not clear to me that these videos are adding any positivity to the proposal, but they are certainly interesting to watch.
Stratasys countered some statements by Stern, saying:
Contrary to statements made by Mr. Stern, Stratasys’ CEO Dr. Yoav Zeif has met with Mr. Stern only once, on March 9, 2023. This meeting was at Mr. Stern’s request. Dr. Zeif did not indicate any support for the proposal and made it clear that Stratasys would respond once the Board’s review of Nano’s proposal was completed. Other than this one meeting, there has been no contact or substantive discussion between Dr. Zeif and Mr. Stern, any directors or any other representatives from either company.
Contrary to what was implied by Mr. Stern, Dr. Zeif fully agrees with the Board’s decision.
Contrary to claims made by Mr. Stern, Stratasys directors receive the majority of their board compensation (which is approved by the Stratasys shareholders) in Stratasys equity and are aligned with the interests of Stratasys shareholders.
Stratasys also hints at the validity of the proposal, suggesting that the management of Nano Dimension may be in question due to pending court litigation.
Nano Dimension management has differed in strategy for use of the company’s vast US$1.1B cash hoard. Management wants to spend it all on acquisitions (such as the Stratasys proposal), whereas shareholders do not believe that is a good use of the funds and wants some of it sent back to shareholders.
Shareholders launched a lawsuit in an Israeli court, which, among other things, would remove Stern and three Nano Dimension board members, and elect two new board members. The court decision has not yet been made, but clearly the management of Nano Dimension could significantly change when it arrives.
It seems to me that pursuing an aggressive acquisition strategy in the middle of a serious board dispute might not be the best idea. A company can’t proceed successfully unless its management is solid, regardless of other factors.
I think Stratasys has a very valid point here: this proposal (or rather future iterations) should probably be shelved until Nano Dimension’s management issues are resolved.
We won’t be seeing the proposed “Nano Stratasys” anytime soon.
Where do we go from here? Stratasys will likely continue as usual, but Nano Dimension faces ongoing management disputes with shareholders. It is unlikely Nano Dimension would be able to mount a higher offer for Stratasys, given that the latest offer basically totaled the entire cash reserve of the company. Unless they can corral some investment partners they may be unable to raise their offer. And partners might be short in supply given the ongoing controversies and bizarre activities of this proposal.
[UPDATE] This morning Stratasys revealed they have just received yet another upgraded offer from Nano Dimension, with what appears to be a US$1 per share boost. I have no idea where Nano Dimension is getting the additional cash for this offer, but it is likely still far too low for Stratasys. I expect another rejection by the weekend.