Zendesk investors reject deal to buy SurveyMonkey parent (updated)

Momentive Global

25/02/2022 22:47

(Adds details of the vote)
    By Svea Herbst-Bayliss
    Feb 25 (Reuters) - Zendesk Inc  ZEN.N  said on Friday that
its investors rejected a proposed takeover of SurveyMonkey
parent Momentive Global  MNTV.O  and that it terminated the
merger agreement.
    "While we were excited by the potential of this transaction
to transform the customer experience and create stockholder
value, we respect and appreciate the perspectives of our
stockholders," Zendesk founder and Chief Executive Officer 
Mikkel Svane said in a statement.
    The deal, valued at roughly $4 billion, had 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 was widely expected that the deal would
be voted down, leading to an end of the proposed takeover.
    The official vote occurred several hours ago and the company
said in a regulatory filing late in day that holders of
101,509,554 shares, or 83.5% of the common stock issued, were
present at the vote. A total of 91,677,121 votes were cast
against the deal while 9,334,851 votes were cast in favor, while
497,581 abstained.  
    In spite of the loss, Svane sounded an optimistic note,
saying that Zendesk's "business has never been stronger" and
that the company is on a "clear path to (generate) $3.4 billion
in revenue by 2025."
    In October, Zendesk agreed to buy Momentive in an all-stock
deal. Activist investment firm Jana Partners urged the company
to abandon the acquisition and investors including Janus
Henderson, Neuberger Berman and Florida's pension system, 
Florida State Board of Administration, spoke out 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 earlier on Friday
before the vote was completed but as early indications suggested
Zendesk investors would reject it.
    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 the 
unpopular attempt to buy Momentive.  urn:newsml:reuters.com:*:nL1N2UR2EC
    

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