Glass Lewis recommends Stratasys shareholders reject Desktop Metal deal

3D Systems

22/09/2023 16:11

By Svea Herbst-Bayliss
       NEW YORK, Sept 22 (Reuters) - Glass Lewis on Friday
urged Stratasys  SSYS.O  investors to vote against the 3D
printer manufacturer's  plans to buy Desktop Metal  DM.N  next
week, becoming the second prominent proxy advisory firm to
recommend against the deal.
    Glass Lewis argued that Stratasys should look at a revised
bid it received from 3D Systems this month  DDD.N  but rejected,
according to the Glass Lewis note, which was published on Friday
and seen by Reuters.
    "The most recent 3D Systems offer warrants further
evaluation by the Stratasys board," Glass Lewis wrote, adding
"it would not be in shareholders' best interests to approve the
Desktop Metal merger at this time in light of the outstanding
competing interest and recent developments."
    On Wednesday, Institutional Shareholder Services, Glass
Lewis' bigger competitor, also recommended against the Desktop
Metal deal. Together the two firms carry significant weight with
shareholders and their recommendations, coming only days before
the Sept. 28 vote, mark the latest twist in a years-long drama
over how the 3D printing industry may be consolidated.
    Glass Lewis wrote that the Desktop Metal merger "could be a
reasonable transaction from the point of Stratasys." But the
note added that Stratasys' "effort" in handling the most recent
revised 3D Systems offer raises "concerns".
    A Stratasys representative did not immediately respond to a
request for comment.
    Stratasys made its all-stock bid for Desktop Metal in May in
a transaction valued at about $1.8 billion. 3D Systems made 
cash and stock bids later, which the company last week rejected
when it also said it was terminating discussions with 3D.
    "In our view, the 3D Systems offer presents not only
compelling value for Stratasys shareholders, but also lower
regulatory hurdles and greater potential scale as composed to
the Desktop Metal merger. The competing offer also includes the
binding offer and $50 million termination fee, among other
potential benefits," the note said.
    

 (Reporting by Svea Herbst-Bayliss; Editing by Sharon Singleton)
 ((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))