Anson Funds pushing Five9 to explore a sale, sources say

Five9

11/07/2024 21:26

(Updates stock price in paragraph 5, Anson assets and
performance in paragraph 10)
    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 walk away from 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 Five9 will heed the calls to explore a
sale, the sources said, requesting anonymity because the matter
is confidential.
    Five9 did not respond to a request for comment and Anson
Funds declined to comment.
    Five9 ended trading up 4.3% at $41.72 on Thursday, with 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 January, Five9 shares have tumbled 45% and Zoom shares
are off 18%, as fears about an economic slowdown drove their
corporate clients to cut spending.
    Anson, which oversees roughly $1.9 billion in assets, last
year hired Sagar Gupta from activist investment firm Legion
Partners as it works to build out its shareholder activism and
engagement strategy. In the first half of the year, the Anson
Investments Master Fund LP gained 10.6% after returning 18.2% in
2023, according to an investor update.
    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))