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Activist Calls for Zendesk to Scrap Momentive Deal

Activist trader Jana Companions has stepped up its marketing campaign to derail consumer-company system Zendesk’s proposed acquisition of the guardian of internet-survey company SurveyMonkey.

Jana, which owns a massive stake in Zendesk, 1st objected in November to the acquisition of Momentive World-wide, expressing it “lacks economical benefit, has questionable strategic logic, and introduces a superior degree of execution threat for Zendesk shareholders.”

In a Jan. three letter to the Zendesk, Jana said the company’s Dec. six proxy assertion seeking shareholder approval of the offer had lifted new considerations that “make it even a lot more apparent that the proposed acquisition is the improper option for Zendesk and its shareholders.”

“Rather than squandering a lot more time and a lot more shareholder capital on a benefit-destroying acquisition that is destined to be rejected by shareholders, the board ought to quickly terminate the transaction and pivot to focusing on far a lot more promising avenues to resolve Zendesk’s rising discount to fair benefit,” the letter urged.

Zendesk agreed to in Oct to obtain Momentive in an all-inventory offer that at the time was worth about $four.one billion. The firms have said that by combining, they could assistance firms get improved responses from buyers.

Momentive shareholders would acquire .225 Zendesk share for just about every Momentive share but the offer is now worth $22.1o for every share as opposed with $28 when it was announced.

Citing the proxy assertion, Jana said in its letter that the offer “appears to be a reactive and impulsive decision, built only in reaction to outreach by Momentive’s advisers as part of a broad sale course of action at the end of August 2021, instead than the product of a well-assumed-out approach.”

In addition, as disclosed in the proxy, “the Momentive acquisition is justified by assuming the whole realization of revenue synergies that, if attained, would add a meager one% to Zendesk’s topline growth level.”

“It is incomprehensible how this de minimis possible profit to growth and benefit could justify the monumental integration threat of executing Zendesk’s 1st-at any time massive acquisition (by a factor of ~50x) with a administration crew with new/unproven executives,” Jana said.

Zendesk and Momentive have just about every independently scheduled a specific assembly of their respective stockholders to be held on February 25, 2022, to approve the transaction.

activist investorJana Companions, Momentive World-wide, surveymonkey, Zendesk