Zendesk’s best M&A strategy starts with failure

Momentive Global

14/02/2022 15:40

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his / her own.)
    By Robert Cyran
    NEW YORK, Feb 14 (Reuters Breakingviews) - The software
firm’s unpopular $4 bln bid for SurveyMonkey’s parent has pushed
down its stock, irked activists and provoked a $16 bln
opportunistic private equity bid. Zendesk’s shareholders can
still vote down its deal. Doing so might secure a higher price
for their own shares.    
    Full view will be published shortly.
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    CONTEXT NEWS 
    -  Shareholder advisory firms Glass Lewis and Institutional
Shareholder Services said on Feb. 11 that shareholders of
Zendesk should vote against its $4 billion all-stock purchase of
Momentive Global, the parent company of SurveyMonkey.
    - Zendesk is under pressure from activist investor Jana
Partners, which says it has a 3% stake in the company and has
come out against the Momentive deal. Janus Henderson Investors,
which owns roughly 5% of Zendesk, has also come out against the
deal.
    - Legion Partners Asset Management is preparing to nominate
three directors to the board of Momentive, according to Reuters’
sources. The hedge fund argues Momentive’s board breached its
fiduciary duty by agreeing to sell itself to Zendesk.
    - On Feb. 10, Zendesk said it had rejected an acquisition
offer of up to $16 billion from private equity firms because the
board said the offer undervalues the company. Zendesk did not
identify the bidders. The non-binding proposal does not require
it to call off the Momentive purchase.
    - Shareholders of both firms are scheduled to vote on Feb.
25 on whether to accept the deal.

 (Editing by John Foley, Sharon Lam and Pranav Kiran)
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