Anson Funds pushing Five9 to explore a sale, sources say

Five9

11/07/2024 18:26

(Adds share move in paragraph 2, and background on Anson and
activist strategies in paragraphs 5-8)
    By Svea Herbst-Bayliss
       July 11 (Reuters) - Investment firm Anson Funds
Management has amassed a stake in Five9  FIVN.O  and is urging
the U.S. call center software company to consider a sale, people
familiar with the matter said.
    The investment firm's move comes on the heels of Five9's
decision last year to rebuff an acquisition offer from Zoom
Video Communications  ZM.O , the maker of the popular virtual
meeting software, one of the sources said.
    There is no certainty that Five9 will heed the calls to
explore a sale, the sources said, requesting anonymity because
the matter is confidential.
    Five9 and Anson did not immediately respond to requests for
comment.
    Five9 shares jumped as much as 6% on the news in afternoon
trading in New York on Thursday, giving the company a market
value of roughly $3 billion.
    Based in San Ramon, California, Five9 makes cloud software
for contact centers. It has more than 3,000 clients and
generated revenue in 2023 of $910.5 million.
    Zoom  ZM.O  inked a $14.7 billion agreement to acquire Five9
in 2021. Five9's shareholders thwarted that deal through a vote
because they objected to being paid in Zoom stock. Zoom's shares
took a hit as the COVID-19 pandemic eased and employees returned
to the office. 
    Five9 said in December it had received new acquisition
interest but that it was no longer exploring it. One of the
sources said that the party it was referring to was Zoom.
    Since then, shares of Five9 and Zoom have lost more than
three-quarters of their value, as fears about an economic
slowdown drove their corporate clients to cut spending.
    Anson, which managers roughly $1.6 billion in investment
funds, including mutual funds, last year hired Sagar Gupta from
activist investment firm Legion Partners as it works to build
out its shareholder activism and engagement strategy.
    Gupta spearheaded Legion's investments in technology, media
and telecommunications and joined Anson in October 2023.
    Anson's efforts come at a time activist investors are eager
to shore up returns during the remainder of the year after
posting, in average, meager first-half returns.
    Part of that strategy, bankers and lawyers said, is to push
companies, especially technology-oriented companies, into
considering a sale even at a time mergers and acquisitions
activity has been lackluster amid worries about interest rates
and regulatory approval.

 (Reporting by Svea Herbst-Bayliss; Editing by Lisa Shumaker)
 ((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))