Nano Dimension‘s shareholders have voted to remove Yoav Stern from the company’s Board of Directors. The decision to replace Stern, who remains CEO, was taken at Nano Dimension’s 2024 Annual General Meeting of Shareholders (AGM). Incumbent Director Michael X. Garrett was also removed. During the meeting, Ofir Baharav and Robert Pons, nominated by activist shareholder Murchinson Ltd., were elected to the Board.
Murchinson, which owns approximately 7.1% of Nano Dimension’s outstanding shares, achieved this victory as it jostles for control over the Israeli electronics 3D printing firm. In a press release, Murchinson claims shareholders have sent a “strong message” by rejecting Stern and Garrett.
This follows the Israeli District Court’s decision on November 21 to validate the results of Nano Dimension’s Extraordinary General Meeting in March 2023. As a result, Murchinson-backed Kenneth Traub and Dr. Joshua Rosensweig could also be installed on the Nano Dimension Board.
The addition of four Murchinson nominees could spell trouble for Nano Dimension’s acquisition of Desktop Metal and its all-cash deal for Markforged. Before the 2024 AGM, Murchinson published a letter to shareholders calling the offers for Desktop Metal and Markforged “overpriced” and “misguided.” In a press release, it added that there is an opportunity for the reconstructed Board to “carefully and critically examine … the merits and success of past and present acquisitions.”
In an official Nano Dimension statement, the Chairman of the Board, Yoav Nissan-Cohen, thanked “Mr. Yoav Stern and General Michael Garrett for their service as Directors on our Board as well as their expertise and guidance in developing our strategy and positioning Nano for the future.” He added: “We welcome Ofir Baharav and Robert Pons to Nano’s Board and look forward to working with them to build long-term value for all Nano shareholders.”
What happened at Nano Dimension’s 2024 Annual General Meeting of Shareholders?
Murchinson has made several bold claims regarding Nano Dimension’s 2024 Annual General Meeting, which it has called a “turning point in Nano’s history.”
According to Murchinson, Baharav and Pons were elected with the support of a “significant majority” of shareholders. However, the exact level of support for the new Board members has not been officially disclosed.
Murchinson also stated that the 2024 AGM was the third general meeting at which “a majority of voting shareholders removed Mr. Stern from the Board.” The investment firm expressed its hope that Nano Dimension’s CEO would “finally adhere to the will of the shareholders and urges him to cease seeking ways to circumvent or delay their decision.”
Murchinson commented that the Stern-led Board had previously “engaged in a plethora of obstructionist, costly legal manoeuvres and novel interpretation of the law and of the Company’s own Articles of Association.” It has now called on the Board to “refrain from any further such actions and instead engage in a constructive dialogue with its shareholders,” reaffirming its intention to “defend shareholders’ rights and agency in court.”
During the 2024 AGM, shareholders voted on Murchinson’s proposal to de-classify the Board, which would remove staggered elections and see all directors stand for reelection in the same year. Murchinson claims approximately 67% reportedly voted in favour of this proposal, falling short of the 70% needed to enact the change.
Despite this, the activist shareholder commented that the result reflects a “clear message from shareholders,” which should “prompt the Board to proactively seek its de-classification at the next general meeting.” It called the classified Board an “anti-shareholder measure” associated with a “lower return to shareholders” and “poor corporate governance due to diminished accountability.”
The meeting also saw shareholders vote to approve Nano Dimension’s proposed compensation for all non-executive directors. However, approximately 75% of eligible votes were cast against the proposed compensation package for Yoav Stern, which Murchinson called “outrageous.”
Nano Dimension’s shareholder battle continues
Nano Dimension’s feud with Murchinson is nothing new. Last February, tensions were ignited when the global investment firm issued an open letter to its fellow shareholders. This criticised the stewardship of Stern, pointing to “poor capital allocation and unfortunate corporate governance.” It argued that Stern possesses a “dubious history as a capital allocator,” and argued that the CEO’s “hand-picked Board” could not be trusted with the “approximately $1 billion in cash on the Company’s balance sheet.”
Murchinson argued that Nano Dimension’s share value had been lagging behind “its only self-reported peer Stratasys by 27% over the past two years.” Ultimately, the letter outlined Murchinson’s plans to change the Nano Dimension Board and deploy the funds in an alternative manner.
The Murchinson letter was followed in March 2023 by Nano Dimension’s Special General Meeting of Shareholders. Both companies published contradictory statements regarding the meeting’s outcome.
Murchinson claimed that all four of its proposals received overwhelming support, including the removal of then-serving Directors Yoav Stern, Yoav Nissan-Cohen, Oded Gera and Igal Rotem. All except Rotem, who resigned in October 2023, remained in place during the most recent AGM. Nano Dimension directly disputed Murchinson’s claims. While the proposals received at least a 92% share of the votes, Nano argued that the percentage of outstanding Nano ordinary shares present was less than 13%, excluding shares owned by Murchinson and Anson.
In November 2024, the Israeli District Court agreed with Murchinson’s version of events, validating the results of the March 2023 meeting. It upheld all four of Murchinson’s proposals.
In addition to the removal of four Directors, these proposals included an amendment which would allow shareholders to fill vacancies on the Board, an amendment allowing shareholders to remove directors at any general meeting with a simple majority, and the immediate addition of Kenneth Traub and Dr. Joshua Rosensweig to the Board.
The court’s decision could have further implications for the makeup of the Nano Dimension Board. Murchinson highlighted that the 2023 AGM saw 52.1% and 52.3% of shareholders vote to remove incumbent Directors Ron Kleinfeld and Christopher Moran, respectively. At the time, they were not replaced as the 70% threshold was still in place. However, given the court’s approval to remove this, Murchinson asserts that these individuals are no longer Board members.
Additionally, one of the amendments proposed at the March 2023 meeting stipulated that the term of any director appointed by the Board would expire at the annual meeting following their appointment. Under this rule, the terms of incumbent Directors Eitan Ben-Eliahu and Georgette Mosbacher, appointed in April 2024 and June 2024, respectively, would have ended at the 2024 AGM.
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Featured image shows Nano Dimension’s offices in Munich. Photo by Michael Petch.
