Stratasys + Desktop Metal
As referenced in the announcement about Stratasys and Desktop Metal entering into an agreement to merge and create a combined company, Desktop Metal has adopted a limited duration shareholder rights plan effective from May 26, 2023, which is scheduled to expire on whichever date occurs earliest out of the completion of the effective date of the merger with Stratasys, or July 24, 2024.
Desktop Metal says its Board of Directors believes the rights plan will maximise shareholder value in connection with the transaction, by promoting “the fair and equal treatment of all shareholders of the company and ensuring that the board remains in the best position to discharge its fiduciary duties to the company and its shareholders.”
The company says the rights plan will guard against open market accumulations and other coercive tactics aimed at gaining control of the company without paying all shareholders a full control premium for their shares. The rights plan will not prevent any person from making a superior proposal pursuant to the terms of the merger agreement according to Desktop Metal.
Read more:
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Under the plan, one preferred stock purchase right will be distributed for each share of common stock held by shareholders of record on June 9, 2023. The company says that under certain circumstances, each right will entitle shareholders to buy one one-thousandth of a share of newly-created Series A Junior Participating Preferred Stock of the Company at an exercise price of 9.00 USD.
The company’s Board of Directors will be entitled to redeem the rights at 0.0001 USD per right at any time before a person or group has acquired 15% or more of the outstanding common stock. The rights will expire on the earlier of July 24, 2024 and the effective date of the merger contemplated between Desktop Metal and Stratasys, subject to the company’s right to extend such date, unless earlier redeemed or exchanged by the company or terminated.
Desktop Metal says that the plan means, subject to limited exceptions, that if a person or group acquires 15% or more of its common stock or announces a tender offer, and the consummation of that offer would result in such ownership, each right will entitle its holder to purchase, at the right’s then-current exercise price, a number of shares of common stock having a market value at that time of twice the right’s exercise price. Rights held by the acquiring person will become void and will not be exercisable.
If Desktop Metal is acquired in a merger or other business combination transaction that has not been approved by the Board of Directors after the rights become exercisable, each right will entitle the holder to purchase, at the right’s then-current price, a number of shares of the acquiring company’s common stock having a market value at that time of twice the right’s exercise price.
Desktop Metal says the dividend distribution to establish the new rights plan will be payable to shareholders of record on June 9, 2023. The rights distribution is not taxable to shareholders according to the company. Further details about the Desktop Metal shareholder rights plan will be contained in a Form 8-K to be filed by the company with the U.S. Securities and Exchange Commission.
Stratasys and Desktop Metal announced the merger on May 26, and the deal is expected to be completed in Q4 of 2023. The companies say the combined brand is expected to generate over 1 billion USD in revenue by 2025.
