Zendesk investors poised to reject deal to buy SurveyMonkey parent

Momentive Global

25/02/2022 13:20

Feb 25 (Reuters) - Zendesk Inc  ZEN.N  investors are poised
to reject a proposed takeover of SurveyMonkey parent Momentive
Global  MNTV.O  on Friday, effectively dooming the roughly $4
billion deal, people familiar with the matter said. 
    The deal has been roundly criticized by prominent investors
including state pension funds and large mutual funds, which
questioned its rationale and said it would likely be too risky.
    Shareholders of both companies had to vote for the deal in
order for the merger to be completed. But with Zendesk investors
lining up against it, it is likely that the proposed takeover
will now be terminated, two sources said.
    The official vote will be held later on Friday.
    A Zendesk representative could not be reached for comment.  
    In October, Zendesk agreed to buy Momentive in an all-stock
deal worth roughly $4 billion. Zendesk's stock price fell after
the acquisition announcement and remained more than 20% below
its pre-deal price until Nov. 30, when activist investment firm
Jana Partners wrote a letter publicly opposing the plans and
urged the company to abandon the acquisition.
    Since then investors including Janus Henderson, Neuberger
Berman and Florida's pension system Florida State Board of
Administration have said they would reject the deal. Proxy
advisory firms Institutional Shareholder Services and Glass
Lewis, which help guide many investors' votes, also recommended
against it.
    "We believe a rejection of the proposed Momentive
acquisition would be a huge win for Zendesk shareholders, a
repudiation of Zendesk’s board, and a strong indication that
Zendesk either requires significant board change or should be
sold," a representative for Jana Partners said on Friday.
    Last week Reuters reported that Jana Partners launched a
proxy fight at Zendesk and nominated four director candidates,
arguing the company needs to be rehabilitated after an unpopular
attempt to buy Momentive. urn:newsml:reuters.com:*:nL1N2UR2EC
    

 (Reporting by Svea Herbst-Bayliss and Krystal Hu
Editing by Tomasz Janowski)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))