Stratasys' board of directors is back to where it was at the beginning of the summer. It is recommending shareholders vote to acquire a competitor to boost the company's competitive edge.
On Tuesday, the board terminated merger discussions after rejecting a boosted offer from South Carolina-based 3D Systems to merge with Stratasys, jointly based in Eden Prairie and Israel.
The company is holding a special shareholders' meeting Sept. 28 to vote on its preferred deal, the acquisition of Desktop Metal, a Massachusetts company that would diversify Stratasys' technology offerings.
Various takeover proposals have surrounded 3-D printing pioneer Stratasys all summer. 3D Systems' offer was unsolicited, as was one to buy controlling interest from Nano Dimension, an Israeli company that is Stratasys' largest shareholder.
Stratasys engaged with 3D Systems, which had increased its offer multiple times over the summer. The companies held in-person meetings Aug. 22, and a revised offer came a week ago.
In that last cash-plus-equity offer, 3D Systems had increased the equity portion of the deal, offered a $50 million termination fee in the event regulators halted the deal and made concessions on key talent that would be retained post-merger.
"We listened to shareholder feedback and made a strong effort to reach a friendly transaction, but it seems there is no price that would satisfy the Stratasys board," said Jeff Graves, president and chief executive of 3D Systems, in a news release issued Monday.
Stratasys' board on Tuesday released a point-by-point rebuttal of the revised offer as it announced it would terminate discussions.
3D Systems responded Wednesday by delivering a signed merger agreement to Stratasys and taking their bid straight to shareholders, urging them to vote "no" to the Desktop Metal deal at the special shareholder meeting.
"Since Stratasys' rejection of our latest proposal earlier this week, we have heard directly from a significant number of Stratasys shareholders who have urged us to provide them with an alternative," Graves said in a Wednesday news release.
Stratasys and 3D Systems seemed to disagree on the total value of the cash-and-equity offer and potential cost synergies of a combined company.
Stratasys' board said the 3D Systems offer significantly undervalues the company; 3D Systems disagrees.