“A Mockery!” – Zendesk Shareholders Call for Change

Charlie Mitchell

The failed Momentive Global acquisition continues to ruffle feathers at Zendesk

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“A Mockery!” – Zendesk Shareholders Call for Change

Prominent shareholder Jana Partners has launched a stinging attack on the Zendesk c-suite as the fallout of its failed $4.1BN acquisition of Momentive Global continues.

The latest development in the ongoing public feud comes after Zendesk CEO Mikkel Svane posted the following tweet, seemingly referencing the failed deal.

Indeed, Svane appears to suggest that shareholders are holding Zendesk back, a sentiment that did not sit well with Barry Rosenstein, Managing Partner at Jana Partners.

In a new letter to the Zendesk Board of Directors, Rosenstein again takes aim at the Momentive deal, calling it “ill-conceived” and “value-destructive”. Meanwhile, he also criticizes the c-suite for failing to communicate clearly with shareholders. He stated:

JANA Partners calls on Zendesk’s Board to put an end to its transparent and costly entrenchment tactics and immediately schedule a date for its 2022 annual meeting.

While other shareholders have remained quieter since the collapse of the Momentive acquisition, many were vocal beforehand. The Institutional Shareholder Services (ISS) – a well-respected advisory firm, even noted that the deal had “the potential to become that rarest of special situations, a merger that is disliked by shareholders of both the seller and the buyer.”

However, until the end, the Zendesk Board stood by the deal. Taking issue with this, Rosenstein said:

Instead of listening to the vocal opposition to the deal in the nearly four months leading up to the shareholder vote, Zendesk’s Board elected to spend tens of millions of dollars of shareholders’ capital to try to push through a transaction that was rejected by vote of more than 90%.

After, Rosenstein concluded: “The Momentive deal rejection – and the Board’s response in its aftermath – underscores why substantial Board change is urgently needed.”

While such discontent rumbles on, Zendesk remains busy, recently investing in Alliants – a guest experience platform – and launching integrations with Act-On Software and Forethought.

However, as the c-suite and shareholders continue to lock horns, Zendesk perhaps run the risk of these announcements being overshadowed.

 

 


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