Zendesk Shareholders Reject Momentive Takeover

Shareholders of customer experience (CX) specialist Zendesk have this evening rejected the proposed acquisition of Momentive, parent of SurveyMonkey. Despite Momentive shareholders giving majority support, the acquisition agreement will now be ditched.

A deal was initially lined up last October, but a number of Momentive investors and advisory firms - including Jana Partners and Janus Henderson - quickly came out against it and vowed to fight the sale. These firms claimed that the price tag - originally c.$4bn, but now equivalent to about $3.8bn - undervalued the business. Earlier this month, Zendesk itself rejected a $16bn unsolicited acquisition offer from a consortium of unnamed private equity firms.

Momentive successfully urged its own stockholders to vote in favour of the transaction at today's special meeting. In a letter sent to investors mid-month, Momentive said its Board of Directors unanimously believed the acquisition would create 'significant and compelling' value for the firm's stockholders. The combined business was said to be in line to generate $4.6bn in revenue and achieve 14-16% non-GAAP operating margin by 2025.

After the Zendesk vote terminated the agreement today, Momentive CEO Zander Lurie said: 'While we are disappointed that Zendesk stockholders did not vote to approve the transaction, we are confident in our go-forward strategy. We have a strong portfolio of products that address valuable customer needs, and our market opportunity is larger and more relevant than ever. We've always been focused on driving stockholder value and remain committed to this important objective on the journey ahead'.

Web sites: www.momentive.ai and www.zendesk.com .