Activist trader Jana Partners has stepped up its marketing campaign to derail consumer-assistance system Zendesk’s proposed acquisition of the parent of net-survey corporation SurveyMonkey.
Jana, which owns a massive stake in Zendesk, very first objected in November to the acquisition of Momentive World, saying it “lacks fiscal advantage, has questionable strategic logic, and introduces a substantial diploma of execution hazard for Zendesk shareholders.”
In a Jan. three letter to the Zendesk, Jana said the company’s Dec. 6 proxy assertion trying to get shareholder approval of the offer experienced lifted new issues that “make it even more evident that the proposed acquisition is the wrong selection for Zendesk and its shareholders.”
“Rather than losing more time and more shareholder capital on a value-destroying acquisition that is destined to be rejected by shareholders, the board ought to right away terminate the transaction and pivot to focusing on much more promising avenues to take care of Zendesk’s rising price cut to honest value,” the letter urged.
Zendesk agreed to in October to invest in Momentive in an all-inventory offer that at the time was really worth about $4.one billion. The firms have said that by combining, they could support companies get better feed-back from consumers.
Momentive shareholders would receive .225 Zendesk share for each Momentive share but the offer is now really worth $22.1o per share in comparison with $28 when it was introduced.
Citing the proxy assertion, Jana said in its letter that the offer “appears to be a reactive and impulsive final decision, manufactured only in reaction to outreach by Momentive’s advisers as part of a wide sale approach at the finish of August 2021, somewhat than the products of a effectively-thought-out strategy.”
In addition, as disclosed in the proxy, “the Momentive acquisition is justified by assuming the comprehensive realization of income synergies that, if obtained, would increase a meager one% to Zendesk’s topline development charge.”
“It is incomprehensible how this de minimis opportunity profit to development and value could justify the monumental integration hazard of executing Zendesk’s very first-at any time massive acquisition (by a variable of ~50x) with a management crew with new/unproven executives,” Jana said.
Zendesk and Momentive have each separately scheduled a distinctive conference of their respective stockholders to be held on February 25, 2022, to approve the transaction.