Nano Dimension Ltd. recently raised concerns over 3D printer manufacturer Stratasys Ltd.’s compliance with legal requirements. Specifically, Nano Dimension reminded Stratasys about the necessity of allowing shareholders to vote for board members individually, rather than solely relying on a pre-determined slate proposed by the company.
In response to this, Stratasys has amended its policies, enabling shareholders to vote for each of the seven board candidates independently. This change will be in effect during Stratasys’ upcoming annual meeting on August 8th.
While Stratasys asserts that its candidates are highly qualified and independent, Nano Dimension asserts that they form an entrenched group with an average tenure on the Stratasys Board spanning 12-15 years. During this period, significant value destruction has allegedly occurred under their supervision.
The importance of replacing a majority of the Stratasys board to avail of Nano Dimension’s $25-per-share cash tender offer should not be underestimated. This offer represents a premium of 26.2% over current market prices.
It is worth noting that Stratasys currently holds 14.1% of its outstanding shares. Recently, it increased an acquisition offer to purchase between 31.9% and 36.9% of the outstanding shares, but Stratasys is advising its shareholders to decline this proposal. Instead, Stratasys suggests that a cash-and-stock buyout bid from 3D Systems Corp. may be a superior alternative to a previously agreed-upon bid from Desktop Metal Inc.
Nano Dimension’s concerns regarding the shareholder voting process shed light on the need for robust corporate governance practices in the industry. The outcome of Stratasys’ annual meeting on August 8th will reveal shareholders’ sentiments towards the proposed changes.