After a challenge by the activist hedge fund run by billionaire Paul Singer, GE have dropped their bid to takeover the German 3D printing company.
Singer’s Elliott Management Corp. built a stake in SLM Solutions and used this position to exert leverage over the company. In the past Singer has used a similar strategy to increase the value of assets including debt in Latin American countries.
While the board of SLM recommended the takeover, GE have refused to play ball with the U.S. fund. This is a blow to the proposed strategy to bring European additive manufacturing technology into the U.S. as an in house offering.
Jeff Bornstein, GE’s chief financial officer, had previously commented that the company was willing to set aside the deal if Singer refused to negotiate on terms acceptable to U.S. manufacturing giant.
The Arcam AB deal is still a possibility as GE have extended the terms of the takeover deal to 1 November. Singer owns a 10% stake in the Swedish company and GE may be less keen to walk away from this deal as Arcam’s EBM 3D printing technology is unique in the market. Conversely, there are a number of options available for users of the laser powder bed 3D printing approach offered by SLM Solutions. One possibility is fellow German 3D printing company, Concept Laser, who may be next in line for GE’s attention.
Not all investors will be disappointed by the failure of the merger to complete as planned. In particular Henrik Hedlund an Arcam board member who sold 31,000 shares shortly after the GE bid was announced. At the time Arcam shares were trading at 290 Swedish Krona, approximately $32.50. The sale netted Hedlund just over $1 million. Arcam AB shares closed at $30 today.
