After investors rejected the proposed $4.1 billion agreement to purchase Momentive, the owners of SurveyMonkey, Zendesk stated today that it was pulling out. The news comes only two weeks after the corporation turned down a $17 billion bid from private equity groups.
“Zendesk, Inc. (NYSE: ZEN) today announced that it has terminated the Agreement and Plan of Merger by and among Zendesk, Milky Way Acquisition Corp., and Momentive Global Inc. (NASDAQ: MNTV) after it did not receive stockholder approval to adopt the proposal to issue shares of Zendesk common stock in connection with the proposed transaction at the Stockholder Meeting held on February 25, 2022,” the company said in a statement.
It had to be a painful blow for CEO and founder Mikkel Svane, who envisioned SurveyMonkey and the rest of the Momentive business as a chance to expand the company’s core customer service emphasis into the larger customer experience market. Nonetheless, in a blog post announcing the outcome of the shareholder vote, he tried to put as good a spin on it as he could. “We intended to buy Momentive in order to improve our capacity to deliver the future of customer intelligence. While we will not proceed with the purchase, we are as committed as ever to assisting our clients in extracting greater value from their data,” he stated in the blog post.
He went on to suggest that the firm will keep trying to build products that would broaden the platform in ways that would benefit the company’s core consumers. That may mean constructing rather than purchasing, which would be more appealing to stockholders who were unhappy with the high price tag or the shift in strategy to customer experience.
Investors, particularly Jana Partners, which owns 3% of the business’s stock, and the Janus Henderson mutual fund, which owns 5%, were dissatisfied with the acquisition and the way it moved the company, according to the Wall Street Journal earlier this month. Activist investors appeared to have won the day in the end.
“While we are sad that Zendesk investors did not vote to accept the acquisition, we are confident in our go-forward approach,” said Momentive CEO Zander Laurie in a statement. Perhaps it will look for a new buyer or find a means to survive on its own with its present product line. Regardless, the agreement has fallen through, and both corporations must now determine how to proceed.