By Svea Herbst-Bayliss
NEW YORK (Reuters) – Glass Lewis on Friday urged Stratasys investors to vote against the 3D printer manufacturer’s plans to buy Desktop Metal 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 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)
