Stratasys Board of Directors Moves to Avoid Any Potential Takeover

Leading 3D printing solutions manufacturer Stratasys has announced that it has adopted a limited duration shareholder rights plan. The move comes just one week after Nano Dimension, another rapidly growing 3D printer manufacturer, announced that it had acquired about 12% of Stratasys. The move shows that the company is potentially preparing to fight against the possibility of a so-called hostile takeover, an acquisition of one company by another against the first company’s wishes.

Shareholder Rights Plans are also colloquially known as Poison Pills. Similar to the those used in classic spy movies, these rights plans are used to prevent hostile takeovers by allowing shareholders to buy shares at a significantly lower price after one shareholder has acquired a certain percentage of shares, in this case it would be if an entity acquires “beneficial ownership of 15% or more of Stratasys’s outstanding ordinary shares in a transaction not approved by the Company’s Board.” It is a defensive tactic that has been used since the early 1980s though one that is not always popular as some believe it to be counteractively harmful to shareholders since it limits potential financial gain. Still it is often used, one recent example is when the Twitter Board of Directors unanimously elected a shareholder rights plan after Elon Musk’s infamous purchase offer for the social media giant.

Photo Credits: Stratasys

Why Has Stratasys Adopted a Shareholder Rights Plan?

Though of course the move could be innocuous, a number of publicly traded companies have adopted similar plans especially during the COVID-19 pandemic, the timing suggests that this is likely in response to Nano Dimension’s news last week. Indeed, when the plans were announced, it created a shockwave in the industry given the potential that if Nano Dimension further increased its shares, it could be successfully take over one of the oldest and successful 3D printing companies in the sector.