Tensions remain high between Stratasys and Nano Dimension, with more revelations coming to light.
The two companies are in the midst of a corporate takeover struggle, as Nano Dimension aims to acquire Stratasys. Nano Dimension has raised over US$1B and plans to use it for acquisitions, targeting Stratasys, which is actually a larger company than Nano Dimension.
Rejected Offers and Shareholder Discontent
Stratasys shows no interest in the takeover bid, and their board of directors has unanimously rejected three increasing offers from Nano Dimension. It appears that the majority of Stratasys shareholders believe the Nano Dimension bid is too low to be taken seriously.
However, there’s more to the story.
Nano Dimension is embroiled in a legal battle with some of their major shareholders, who are concerned about how the company’s cash reserve—the investors’ money—will be spent. A group of Nano Dimension shareholders, led by lead investor Murchison, filed a lawsuit in Israel to halt the company’s strategy. A special shareholder meeting resulted in a 92% vote to remove Nano Dimension’s CEO and four board members.
Legal Battle and Court Decision
Shareholders feel that the money would be better spent in ways other than acquisitions. This belief is supported by the fact that Nano Dimension’s stock market value is somehow lower than their cash reserve.
How can you be worth less than the money you have? One way is that there is a belief that money will come to nothing.
The lawsuit questions whether recent decisions by Nano Dimension management were in the company’s best interest. Nano Dimension, however, strongly disputes these allegations, with their CEO resorting to highly unusual daily videos dismissing the allegations and questioning Stratasys management.
This week, the Israeli court announced its decision on the case.
According to Nano Dimension’s press release, the company is allowed to continue operating as is and proceed with their acquisition strategies. They are also appealing the court’s directive to add two observers to the Nano Dimension board of directors.
A translated excerpt from the court ruling states:
““…[the court] has to consider the conduct of the company until the decision in the main proceedings with a board composition whose legality is in doubt and more importantly, with a board composition that even if legal…, it is doubtful if the shareholders trust this board composition and the decisions it makes. It was apparent that the company is in no hurry to get a decision on the legality of the special shareholders’ meeting …, even though at the same time substantial decisions are being made at the company and even though there is prima facie doubt whether these decisions are being made by a management that is acceptable to the shareholders.”
Somehow Nano Dimension management believes this court ruling provides them full authority to move forward, but after reading that part of the decision, it seems to be not quite the case.
Stratasys responded to the case results, emphasizing that the Israeli court explicitly questions whether substantial decisions are being made in the best interest of shareholders. They also pointed out that Nano Dimension’s press release omitted the fact that the “court-ordered temporary observers are Murchinson’s dissident director candidates, Ken Traub and Joshua Rosensweig.”
This suggests that Nano Dimension shareholders have gained a foothold on the board of directors, which will likely impact the company moving forward, even though they are officially observers and unable to participate in votes.
Stratasys concluded that their board continues to believe Nano Dimension’s campaign against Stratasys is of questionable legal authority and credibility and poses significant risks to the company and its shareholders.
It remains unclear how Nano Dimension could continue with this takeover bid, as they don’t appear to have enough cash to raise their already rejected offer. It may be time for Nano Dimension to reconsider their strategies.