Zendesk’s latest problem is an activist investor – Marketingwithanoy

Zendesk has been has been having some problems with its investors lately.

Last month, it turned down a $17 billion takeover offer from a consortium of private equity investors because the deal had undervalued the company. Later in the month, disgruntled investors rejected the company’s $4.1 billion takeover offer for SurveyMonkey’s parent company, Momentive.

That’s a lot of turbulence for any company to deal with in such a short time, but yesterday activist investor Jana Partners, who owns 2.5% of the company’s stock, piled up an SEC filing that wasn’t very friendly. used to be.

In an unlimited request, the company informed Zendesk’s management that it was not at all satisfied and said it would nominate four candidates for election to Zendesk’s board of directors at the company’s 2022 shareholder meeting.

“We believe that the misguided attempt by the Zendesk Board of Directors (the “Board”) to force Momentive Global Inc. (“Momentive”), has exposed the board’s blatant disregard for shareholders and continued failing oversight. Without a meaningful board change, we believe Zendesk will not be able to live up to its potential and will face a continued valuation discount – with shareholders paying the price,” Jana wrote in the filing.

Jana’s application comes after a slew of public letters and a presentation in which it questioned the Momentive deal and urged Zendesk’s management to cancel the acquisition.

At the time of the $17 billion takeover bid, we analyzed Zendesk’s financial data. Momentive would have accelerated growth despite investor objections, but even without it, the company was on track to do just fine, so much so that $17 billion seemed like a low-ball offer.

Our argument was simple: the offer to buy the company was worth a somewhat meager 30% premium to market value, and with revenue growth accelerating in recent quarters, Zendesk had a credible growth story behind it.

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