Stratasys’ Board of Directors has unanimously adopted a limited duration shareholder rights plan, designed to ‘protect the long-term interests’ of the company and its shareholders.
The 3D printing pioneer says the plan, which replaces its current shareholder Rights Plan that was set to expire at the end of the year, contains enhanced shareholder protections that are intended to limit the scope of the Rights Plan. The Rights Plan is designed to give all shareholders (other than an offeror) a way to voice their position directly to the Board on certain types of offers and whether the plan should apply to those offers. It also seeks to limit the likelihood that any entity, person or group would gain control or significant influence over Stratasys through the open-market or other accumulation of shares without appropriately compensating all Stratasys shareholders.
However, Stratasys confirms it is not intended to entirely prevent attempts to purchase the company, or interfere with any actions that its Board determines to be in the best interests of its shareholders. Instead, the plan will allow the Board sufficient time to make informed judgments about any attempts to control or significantly influence the company. Interested parties will now need to negotiate directly with the Board prior to any attempt to gain control or significantly influence. The board will then meet for an advisory vote of shareholders (other than the offeror), which will be the primary factor in the Board’s determination of whether to grant an exemption from the Rights Plan for that offer.
The news follows a turbulent year which saw Stratasys at the centre of one of the additive manufacturing (AM) industry’s biggest acquisition stories after AM electronics firm Nano Dimension offered to acquire the company for 1.1 billion USD. Stratasys had previously deployed a shareholder Rights Plan in July 2022, one week after Nano Dimension had acquired a 12.12% in its shares, and later rejected two more takeover bids from the company. The saga continued in May when Stratasys announced plans to merge with Desktop Metal in a deal worth 1.8 billion USD. This was quickly followed by another takeover attempt by fellow AM pioneer 3D Systems, which Stratasys also rejected, despite proxy advisory firm Institutional Shareholder Services (ISS) suggesting that the 3D Systems offer presented a “more convincing route to value creation." However, by September, the ongoing drama came to an end when Stratasys announced the termination of the merger agreement with Desktop Metal after its shareholders decided not to approve the deal. Speaking to TCT shortly after, Desktop Metal CEO Ric Fulop said: ”We'll remain an independent company. Desktop Metal is not for sale.”
With this new plan, Stratasys says it will issue one right for each ordinary share outstanding as of the close of business on January 2, 2024. While the Rights Plan is effective immediately, the rights generally would become exercisable only if an entity, person or group acquires beneficial ownership of 15% or more of Stratasys’ outstanding ordinary shares in a transaction not approved by the Company’s Board. If that happens, each holder of a right (other than the acquiring entity) will have the right to purchase one ordinary share at a purchase price of $0.01 per share. In addition, at any time after an entity, person or group acquires 15% or more of the Company’s ordinary shares, the Company’s Board of Directors may exchange one ordinary share of the Company for each outstanding right.
Speaking exclusively to TCT at this year's Formnext, Stratasys CEO Yoav Zeif appeared to remain optimistic about future M&A opportunities, claiming he still believes in consolidation.
“We don't do anything in a rush,” Zeif said. “Desktop Metal was not in a rush, we worked with them for almost a year and a half. Everything has to be strategic."