Activist investor Jana Companions has stepped up its marketing campaign to derail purchaser-services system Zendesk’s proposed acquisition of the mum or dad of web-study firm SurveyMonkey.
Jana, which owns a significant stake in Zendesk, to start with objected in November to the acquisition of Momentive Worldwide, expressing it “lacks economical merit, has questionable strategic logic, and introduces a large diploma of execution chance for Zendesk shareholders.”
In a Jan. three letter to the Zendesk, Jana explained the company’s Dec. 6 proxy assertion looking for shareholder acceptance of the offer had lifted new concerns that “make it even much more evident that the proposed acquisition is the incorrect alternative for Zendesk and its shareholders.”
“Rather than wasting much more time and much more shareholder capital on a worth-destroying acquisition that is destined to be turned down by shareholders, the board must promptly terminate the transaction and pivot to focusing on far much more promising avenues to resolve Zendesk’s expanding lower price to truthful worth,” the letter urged.
Zendesk agreed to in October to buy Momentive in an all-inventory offer that at the time was well worth about $4.1 billion. The firms have explained that by combining, they could help corporations get improved opinions from clients.
Momentive shareholders would receive .225 Zendesk share for every Momentive share but the offer is now well worth $22.1o for each share in contrast 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 conclusion, built only in response to outreach by Momentive’s advisers as portion of a broad sale approach at the conclude of August 2021, relatively than the product or service of a effectively-assumed-out technique.”
Furthermore, as disclosed in the proxy, “the Momentive acquisition is justified by assuming the total realization of profits synergies that, if obtained, would add a meager 1% to Zendesk’s topline development charge.”
“It is incomprehensible how this de minimis likely reward to development and worth could justify the monumental integration chance of executing Zendesk’s to start with-ever significant acquisition (by a element of ~50x) with a management group with new/unproven executives,” Jana explained.
Zendesk and Momentive have every independently scheduled a specific meeting of their respective stockholders to be held on February twenty five, 2022, to approve the transaction.