Activist investor Jana Associates has stepped up its campaign to derail consumer-assistance system Zendesk’s proposed acquisition of the dad or mum of world wide web-study firm SurveyMonkey.
Jana, which owns a massive stake in Zendesk, to start with objected in November to the acquisition of Momentive World wide, declaring it “lacks economical merit, has questionable strategic logic, and introduces a high diploma of execution threat for Zendesk shareholders.”
In a Jan. three letter to the Zendesk, Jana claimed the company’s Dec. 6 proxy assertion trying to find shareholder acceptance of the deal experienced raised new concerns that “make it even far more clear that the proposed acquisition is the erroneous decision for Zendesk and its shareholders.”
“Rather than wasting far more time and far more shareholder capital on a price-destroying acquisition that is destined to be turned down by shareholders, the board should right away terminate the transaction and pivot to focusing on far far more promising avenues to solve Zendesk’s growing discount to truthful price,” the letter urged.
Zendesk agreed to in October to purchase Momentive in an all-stock deal that at the time was truly worth about $four.one billion. The firms have claimed that by combining, they could assistance corporations get much better opinions from consumers.
Momentive shareholders would receive .225 Zendesk share for each individual Momentive share but the deal is now truly worth $22.1o per share in comparison with $28 when it was introduced.
Citing the proxy assertion, Jana claimed in its letter that the deal “appears to be a reactive and impulsive final decision, manufactured only in reaction to outreach by Momentive’s advisers as element of a broad sale process at the end of August 2021, alternatively than the product of a well-imagined-out tactic.”
Additionally, as disclosed in the proxy, “the Momentive acquisition is justified by assuming the whole realization of income synergies that, if achieved, would incorporate a meager one% to Zendesk’s topline progress amount.”
“It is incomprehensible how this de minimis possible profit to progress and price could justify the monumental integration threat of executing Zendesk’s to start with-at any time massive acquisition (by a issue of ~50x) with a management crew with new/unproven executives,” Jana claimed.
Zendesk and Momentive have each individual separately scheduled a exclusive assembly of their respective stockholders to be held on February twenty five, 2022, to approve the transaction.