It’s another week, and of course there is a major development in the ongoing Stratasys takeover saga.
As readers may recall, Stratasys, one of the leading players in 3D printing, has been the subject of a series of mergers and takeover bids in the past couple of months:
- Nano Dimension, a smaller company, has made repeated bids to take control of Stratasys. All have been unsuccessful thus far
- 3D Systems has announced several bids of their own for Stratasys, of similar financial value to Nano Dimension’s, but with far larger potential due to the enormous size
- Stratasys on their own announced an upcoming merger between them and Desktop Metal
Nano Dimension’s latest offer expires July 24, extended from an earlier date. However, yesterday the company announced they’ve upped this bid, and significantly so.
Their intention is to acquire sufficient shares of Stratasys to gain control over the company (i.e. more than 50%). They already own 14.5% of the company, so they only require 35.5% of the outstanding shares to hit their goal.
Their earlier bids focused on taking up all the shares, but as the bids increased, Nano Dimension found they did not have the cash to complete that strategy. Their more recent bids have instead focused on gaining only the required shares to take control, with their previous bid being US$20.05 per share.
It seems they must not have been very successful in attracting Stratasys shareholders to their offer, because they’ve now changed the offer to a much larger US$24.00 per share. That’s a near 20% jump in cash value.
Nano Dimension describes their latest offer as “220% more cash than alternative offers”. The alternative, in this case, would be 3D Systems’ offer, which was close in immediate value to Nano Dimension’s prior offer. The difference is that Nano Dimension is literally buying shares, while 3D Systems’ offer is composed of some cash and some shares in the merged company. I don’t see much difference because 3D Systems is publicly traded and one could easily sell the shares after that merger.
There’s something curious in the latest Nano Dimension offer. They write:
“Nano Dimension has increased the offer price of its special tender offer (the “Offer”) from $20.05 to $24.00 per share in cash, less any required withholding taxes and without interest, to purchase between 31.9% and 36.9% of the outstanding ordinary shares of Stratasys.”
It’s those percentages that I’m concerned with here. Recall that Nano Dimension owns 14.5% of Stratasys shares already, meaning they would theoretically require at least 35.5% of the outstanding shares to get to the 50% mark. However, they are intending on settling for only 31.9%?
That would leave them with 46.4% of the company, less than 50%. That doesn’t seem to be correct, unless something else is going on. Some possibilities:
- They have already attracted a number of Stratasys shareholders who have agreed to sell their shares at the prior offer level. That would be too bad for them, as they just lost out on the US$4 per share increase. This could be perhaps five percent of the shares.
- Nano Dimension is aware of at least five percent existing Stratasys shareholders that take their side, and presumably would vote for their proposals: control with less than 50%
- Nano Dimension has somehow secretly acquired more Stratasys shares through another means, perhaps through a subsidiary, or intends to do so in the near future
Or something else. We can’t know at this point, but it is suspicious that the plan includes the possibility of buying less than 35.5% of the shares.
Nano Dimension wrote:
“The successful completion of the special tender offer would increase Nano Dimension’s beneficial ownership of Stratasys to between 46% and 51% of the outstanding ordinary shares, inclusive of the approximately 14.1% of Stratasys’ outstanding ordinary shares that Nano Dimension currently owns.”
Again, this is puzzling because our understanding was that Nano Dimension owned 14.5% of the shares, not 14.1%.
Nevertheless, the saga continues, at least until July 24, when the Nano Dimension offer expires.
Unless it is extended. Again.
One wonders what’s going through the mind of a Stratasys shareholder at this point: clearly the bids are rising, so why make a decision now? I suspect many are waiting because they don’t believe any of these offers are sufficient to proceed.
Via Nano Dimension