A Canadian investment consulting company that owns about 4% of the shares of the 3D printer manufacturing company nano dimension filed an urgent request for a temporary injunction to prevent the Israeli Nano Dimension from convening its shareholders’ meeting next week.
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The investment company, Murchinson (Murchinson), under the management of Mark Bistriser, submitted the request to the Central District Court through the law firm Goldfarb Seligman & Co. In the application to the court, she reveals that she offered to purchase the company but was rejected by the board of directors.
Nano Dimension is a company with relatively negligible activity, which raised over 1.5 billion dollars in the record period of 2020-2021, and is currently traded on Nasdaq at a value of 602 million dollars, and has over 1 billion dollars in its coffers (after an 86% fall in the stock from the record in February of last year) .
The company recently called a meeting in which it asks the shareholders to approve, among other things, a repricing of the options of the chairman and CEO Yoav Stern, as well as to make an update to the indemnification given to the directors. The options for approximately 10% of the company’s shares, whose original exercise price is $6.16, should be repriced at $2.46 – less than half of the original exercise price – a price similar to the market price.
According to Murchinson, there is no justification for this, and it seems that the value of the benefit increases to tens of millions of dollars. The meeting is expected to be held on December 13, and shareholders who do not attend physically can send their votes until December 6.
Murchinson is asking the court to grant a temporary injunction on a unilateral basis, ordering Nano Dimension not to hold the meeting. According to her, she applied to the company with the demand to receive all the documents (the decisions of the board of directors and its committees, as well as economic and legal opinions) concerning the issues at hand, but instead of receiving an answer, she was required to provide the company with certificates on the company’s real estate rights. After giving the certificates, Nano Dimension refused the request on the grounds that the applicant “lacks good faith” and that she is trying to threaten the directors.
“Holding the vote will cause irreversible damage”
Murchinson writes to the court that she has a fundamental right enshrined in the Companies Act and case law, to receive these documents, and that the company’s objection is baseless and inconsistent with the rules of proper corporate governance.
“The applicant is indeed an activist investor at times and she even offered to purchase the company, but this does not imply a lack of good faith, but rather a failure in the company’s conduct, which the applicant believes can be corrected in order to maximize the company’s value,” it says.
According to her, holding the vote will cause her, and all the shareholders (and even the company) irreparable damage, and it is a violation of her property rights. “The conduct of the company is puzzling and demanding,” the Murchinson people believe. “It is not at all clear why the company behaves as if it has something to hide, in particular when it comes to decisions concerning the remuneration conditions of the office bearers, and especially to special and exceptional remuneration conditions for the CEO of the company, who is also the chairman of the board of directors.”
Talks were held between Murchinson and Nano Dimension’s management regarding the company’s business, and in September Murchinson submitted to the board of directors a non-binding offer to purchase all of Nano Dimension’s shares for $4 per share, at a value of $995 million, a premium of approximately 52% over the price of the ADS on Nasdaq at the time.
The board rejected the offer (about two years ago the stock was already trading at significantly higher prices). In October, at an investor conference in New York, a representative of Murchinson tried to set up a meeting with Stern, and according to the company, at the meeting that was held, Stern “began to throw insults” and the company’s representative sent a letter later that day in which he made allegations that Bistriser was “physically and verbally harassing” Stern.
Attorney Noa Havdela from the Sullivan Tel Aviv attorney’s office, representing Nano Dimension, responded: “The company has not yet received the request or the statement of claim and will respond in a matter-of-fact manner if required. However, on the face of it, it appears that this is another of the steps recently taken by one of the owners the shares that is not satisfied with the fact that the company’s board of directors rejected his offer to take over the company, all with the aim of making a personal profit for him at the expense of the good of the company and its shareholders.”
Exchange of directors and a loss of 34 million dollars
Meanwhile, at the end of the week, Nano Dimension published two reports, the first is the third quarter reports, and the second concerns the changes in the board of directors. Dr. Yoav Nissan-Cohen, former CEO of Tower, will replace Yaron Eitan, who is leaving after a little less than three years.
Eitan, who was a member of the audit and compensation committees of the board of directors, served as a director from February 2020. In April 2021, Nano Dimension paid 70 million dollars for the company DeepCube, which was founded by Eitan and Dr. Eli David, who was also a director.
In the third quarter reports, Nano Dimension reported revenues of $10 million (similar to 2021 as a whole) and a loss of $33.8 million.