December 2, 2023


Imagination at work

Activist Calls for Zendesk to Scrap Momentive Deal

Activist trader Jana Associates has stepped up its campaign to derail shopper-provider platform Zendesk’s proposed acquisition of the parent of internet-survey firm SurveyMonkey.

Jana, which owns a large stake in Zendesk, to start with objected in November to the acquisition of Momentive Worldwide, expressing it “lacks financial merit, has questionable strategic logic, and introduces a substantial diploma of execution possibility for Zendesk shareholders.”

In a Jan. three letter to the Zendesk, Jana explained the company’s Dec. six proxy assertion trying to find shareholder approval of the offer had lifted new worries that “make it even much more evident that the proposed acquisition is the incorrect alternative for Zendesk and its shareholders.”

“Rather than losing much more time and much more shareholder funds on a price-destroying acquisition that is destined to be rejected by shareholders, the board really should instantly terminate the transaction and pivot to concentrating on much much more promising avenues to take care of Zendesk’s rising discounted to honest price,” the letter urged.

Zendesk agreed to in Oct to buy Momentive in an all-inventory offer that at the time was really worth about $ billion. The companies have explained that by combining, they could help companies get superior feed-back from customers.

Momentive shareholders would acquire .225 Zendesk share for every Momentive share but the offer is now really worth $22.1o for every share compared with $28 when it was declared.

Citing the proxy assertion, Jana explained in its letter that the offer “appears to be a reactive and impulsive determination, manufactured only in response to outreach by Momentive’s advisers as portion of a wide sale system at the conclusion of August 2021, fairly than the products of a perfectly-imagined-out tactic.”

Also, as disclosed in the proxy, “the Momentive acquisition is justified by assuming the whole realization of income synergies that, if obtained, would include a meager one% to Zendesk’s topline development rate.”

“It is incomprehensible how this de minimis likely gain to development and price could justify the monumental integration possibility of executing Zendesk’s to start with-ever large acquisition (by a aspect of ~50x) with a administration workforce with new/unproven executives,” Jana explained.

Zendesk and Momentive have every individually scheduled a exclusive conference of their respective stockholders to be held on February 25, 2022, to approve the transaction.

activist investorJana Associates, Momentive Worldwide, surveymonkey, Zendesk