SLM Said to Tap Lazard to Study Options After GE Failed Bidby
SLM founder Ihde and DPE said willing to sell shareholdings
Interim CEO says Lazard advising SLM following failed GE sale
SLM Solutions AG has hired Lazard Ltd. to help it explore strategic options six months after General Electric Co. withdrew a 680 million-euro ($737 million) offer for the 3-D printing company, according to people familiar with the matter.
The review could lead to the sale of a stake in the Luebeck, Germany-based company or even a complete takeover, the people said, asking not to be identified because the talks are private. The shares rose as much as 5.2 percent on the news and traded 3 percent higher as of 11:58 a.m. in Frankfurt.
"We’ve hired Lazard to advise us on how to best deal with the new situation following the failed transaction with General Electric," Uwe Boegershausen, SLM’s chief finance officer and interim chief executive officer, told Bloomberg News on Monday. He declined to provide additional details.
Two of the company’s largest owners are willing to sell their combined stake of almost 30 percent, a step that would pave the way for a new anchor shareholder to swoop in, the people said. The move may be a prelude to a full takeover of Luebeck-based SLM, which makes machines that produce aircraft components and other parts with a printing technique known as additive manufacturing, they said.
Company founder Hans Joachim Ihde, who holds 24 percent, and DPE Deutsche Private Equity B.V., which owns 5.4 percent, are willing to sell their stakes, enabling a potential buyer to purchase nearly 30 percent at once, the people said. Thirty percent is the threshold at which stakeholders are obliged to make a public offer under German takeover law.
Possible suitors, which include family offices as well as large companies like China’s Shanghai Electric Group Co. Ltd. or Applied Materials Inc. and United Technologies Corp., have been invited to submit notifications of interest in May, these people said. A combined stake purchase would make the acquirer SLM’s largest shareholder, ahead of the Paul Singer-led hedge fund Elliott Management Corp., which amassed 20 percent of SLM after GE first announced its offer of 38 euros a share.
Spokespersons for Applied Materials, UTC and Lazard declined to comment. Shanghai Electric wasn’t immediately available to comment.
Boston, Mass.-based GE walked away from the deal in October after failing to meet the 75 percent acceptance threshold because Elliott refused to tender its stake, betting on a higher offer. The U.S. engineering behemoth instead moved to buy SLM’s German rival Concept Laser, leaving SLM scrambling because GE is one of its largest customers.
Consolidation is stirring the global market for industrial 3-D printers and materials, which grew 17 percent to $6.06 billion last year, according to data from Wohlers Associates Inc. The research firm projects the market to balloon to $26.2 billion by 2022.
SLM’s shares have taken a hit since GE announced it wouldn’t raise its offer on Oct. 21, calling Elliott’s bluff. The failed acquisition forced the German company in December to lower its forecast for 2016, citing the “changed conditions arising from the takeover negotiations” and the “accompanying unsettling of markets.”
The debacle also cost Chief Executive Officer Markus Rechlin his job as SLM removed him from the post in January, assigning his responsibilities to Boegershausen.
With Elliott still a formidable force, a full takeover of SLM is far from a foregone conclusion, the people cautioned.