Proxy advisor ISS opposes Stratasys, Desktop Metal merger in 3D printing
Reuters
Published Sep 20, 2023 04:50PM ET
Updated Sep 20, 2023 05:31PM ET
By Svea Herbst-Bayliss
NEW YORK (Reuters) - Influential proxy advisory firm Institutional Shareholder Services recommended 3D printer manufacturer Stratasys (NASDAQ:SSYS) shareholders reject plans to buy Desktop Metal, saying another offer "presents a more convincing route to value creation," in a note seen by Reuters on Wednesday.
ISS's recommendation, which tends to carry significant weight with shareholders, comes only days before the Sept. 28 vote and marks the latest twist in a years-long drama over how the 3D printing industry may be consolidated.
"It is not clear that it (the all-stock offer Stratasys made for Desktop Metal) creates value for 3D printer manufacturer Stratasys shareholders," ISS wrote in its note to clients with a headline "vote against acquisition at SSYS meeting."
Representatives for Stratasys did not immediately respond to a request for comment.
Instead, ISS wrote that a bid from 3D Systems (NYSE:DDD) to buy Stratasys, which was disclosed last week and is the latest in a series of overtures to buy the company that now plans to buy someone else, would offer more value to shareholders.
Desktop Metal made its all-stock deal proposal on May 25, valuing its equity at approximately $591 million in aggregate.
The deal would generate about $50 million in revenue synergies plus $50 million in annual cost savings by 2025, the Stratasys board has argued. The directors felt this deal was more attractive than others, including overtures from 3D Systems and Nano Dimension (NASDAQ:NNDM).
But as Stratasys', Desktop Metal's and 3D Systems' share prices have dropped in the last 52 weeks, ISS argued that 3D Systems' cash and stock offer for Stratasys "holds out an important hedge against further declines."
3D Systems offered to pay $7 in cash and 1.6387 3D shares per Stratasys share, which would leave them owning 46% of the combined company. Stratasys last week rejected the offer and said it was terminating discussions with 3D.
Get The News You Want
Stratasys investor Nano Dimension, which owns 14.1% of the company, said last week that it would vote against the merger.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.