Stratasys has announced that its Board of Directors has unanimously adopted a shareholder rights plan for a limited duration.
A shareholder rights plan is typically deployed as a defensive strategy against hostile takeovers by giving existing shareholders the right to purchase more shares at a discount in a bid to dilute the ownership interest of parties planning a takeover. This comes a week after Nano Dimension acquired 12.12% of Stratasys shares and just hours after Nano Dimension CEO Yoav Stern told TCT his company was ‘not necessarily’ interested in a takeover of Stratasys.
The Rights Plan, which has a 364-day term that expires on July 24, 2023, is intended to protect the long-term interests of Stratasys and its shareholders, according to the company. By deploying this strategy, Stratasys believes it will encourage any person or group seeking to gain control of the company to negotiate directly with its Board of Directors.
Stratasys says the Rights Plan is designed to ‘reduce the likelihood that any entity, person or group would gain control of, or significant influence over, Stratasys through the open-market accumulation of the Company’s shares without appropriately compensating all Stratasys shareholders for control.’ The company adds it is not intended to ‘prevent or interfere with any action with respect to Stratasys that the Board determines to be in the best interest of the Company and its shareholders. Instead, it will position the Board to fulfil its fiduciary duties on behalf of all shareholders by ’ensuring that the Board has sufficient time to make informed judgements about any attempts to control or significantly influence Stratasys.
The deployment of the Rights Plan will see Stratasys issue one right for each ordinary share outstanding as of the close of business on August 4, 2022. 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 shares in a transaction not approved by the Stratasys Board. In such a scenario, each holder of a right (other than the acquiring party) 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 (other than rights owned by such entity, person or group, which would have become void).
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