November 29, 2023

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Activist Calls for Zendesk to Scrap Momentive Deal

Activist investor Jana Partners has stepped up its campaign to derail purchaser-assistance system Zendesk’s proposed acquisition of the mum or dad of internet-survey enterprise SurveyMonkey.

Jana, which owns a big stake in Zendesk, to start with objected in November to the acquisition of Momentive World-wide, indicating it “lacks economic advantage, has questionable strategic logic, and introduces a higher degree of execution possibility for Zendesk shareholders.”

In a Jan. 3 letter to the Zendesk, Jana said the company’s Dec. six proxy statement trying to find shareholder acceptance of the deal had raised new problems that “make it even extra apparent that the proposed acquisition is the improper preference for Zendesk and its shareholders.”

“Rather than wasting extra time and extra shareholder cash on a worth-destroying acquisition that is destined to be turned down by shareholders, the board ought to immediately terminate the transaction and pivot to focusing on considerably extra promising avenues to resolve Zendesk’s growing price cut to honest worth,” the letter urged.

Zendesk agreed to in October to invest in Momentive in an all-inventory deal that at the time was really worth about $4.1 billion. The firms have said that by combining, they could support corporations get improved suggestions from buyers.

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

Citing the proxy statement, Jana said in its letter that the deal “appears to be a reactive and impulsive decision, created only in reaction to outreach by Momentive’s advisers as aspect of a broad sale method at the end of August 2021, instead than the merchandise of a very well-thought-out tactic.”

Additionally, as disclosed in the proxy, “the Momentive acquisition is justified by assuming the entire realization of profits synergies that, if realized, would include a meager 1% to Zendesk’s topline growth amount.”

“It is incomprehensible how this de minimis possible benefit to growth and worth could justify the monumental integration possibility of executing Zendesk’s to start with-at any time big acquisition (by a aspect of ~50x) with a administration staff with new/unproven executives,” Jana said.

Zendesk and Momentive have every single separately scheduled a unique assembly of their respective stockholders to be held on February twenty five, 2022, to approve the transaction.

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