Activist trader Jana Partners has stepped up its campaign to derail purchaser-assistance platform Zendesk’s proposed acquisition of the mum or dad of net-survey company SurveyMonkey.
Jana, which owns a huge stake in Zendesk, very first objected in November to the acquisition of Momentive International, expressing it “lacks monetary advantage, has questionable strategic logic, and introduces a superior degree of execution risk for Zendesk shareholders.”
In a Jan. three letter to the Zendesk, Jana explained the company’s Dec. six proxy assertion looking for shareholder approval of the offer had raised new issues that “make it even more apparent that the proposed acquisition is the wrong decision for Zendesk and its shareholders.”
“Rather than wasting more time and more shareholder capital on a benefit-destroying acquisition that is destined to be rejected by shareholders, the board really should straight away terminate the transaction and pivot to concentrating on far more promising avenues to solve Zendesk’s expanding price cut to truthful benefit,” the letter urged.
Zendesk agreed to in Oct to purchase Momentive in an all-inventory offer that at the time was truly worth about $four.1 billion. The corporations have explained that by combining, they could support firms get much better feedback from consumers.
Momentive shareholders would receive .225 Zendesk share for just about every Momentive share but the offer is now truly worth $22.1o for each share when compared with $28 when it was declared.
Citing the proxy assertion, Jana explained in its letter that the offer “appears to be a reactive and impulsive determination, produced only in reaction to outreach by Momentive’s advisers as aspect of a broad sale procedure at the end of August 2021, fairly than the product of a well-imagined-out technique.”
Furthermore, as disclosed in the proxy, “the Momentive acquisition is justified by assuming the full realization of earnings synergies that, if attained, would add a meager 1% to Zendesk’s topline development charge.”
“It is incomprehensible how this de minimis prospective gain to development and benefit could justify the monumental integration risk of executing Zendesk’s very first-ever huge acquisition (by a factor of ~50x) with a management crew with new/unproven executives,” Jana explained.
Zendesk and Momentive have just about every independently scheduled a particular conference of their respective stockholders to be held on February 25, 2022, to approve the transaction.