HomeBusinessExclusive - Jana Partners launches proxy fight at Zendesk, nominates four to...

Exclusive – Jana Partners launches proxy fight at Zendesk, nominates four to board

BOSTON : Jana Partners has nominated four administrators to the board of Zendesk, arguing the corporate should be rehabilitated after an unpopular try to purchase Momentive Global, mother or father of net-survey firm SurveyMonkey, in accordance to a letter seen by Reuters.

Jana Partners launched the proxy contest per week earlier than Zendesk shareholders are scheduled to vote on the corporate’s proposed acquisition of Momentive Global on Feb. 25.

It additionally comes only some days after Zendesk stated it had rebuffed an roughly $17 billion bid from a consortium of personal fairness corporations wanting to purchase the customer support software program firm.

Even with the Momentive deal going through a probable rejection by shareholders, Jana stated within the letter that lasting injury had been carried out.

“We believe the board must either be replaced with capable fiduciaries, or reverse course and engage with interested strategic and financial buyers to sell the company,” Jana Partners Managing Director Barry Rosenstein wrote within the letter to the board on Wednesday.

The activist nominated Quincy Allen, Felicia Alvaro and Jeffrey Fox, executives with experience within the software program and know-how industries, in addition to expertise in mergers and acquisitions and finance.

It additionally nominated Scott Ostfeld, a companion and a co-portfolio supervisor at Jana Partners.

A Zendesk consultant was not instantly out there for remark.

The four candidates would run in opposition to Zendesk’s four administrators who’re slated for election this yr, together with two of the three Zendesk administrators who served on a transaction committee that spearheaded the Momentive transaction.

PERSISTENT DISCOUNT

The firm’s 10-member board has eight unbiased administrators however solely a portion stand for reelection annually.

“We believe the board has all but assured that Zendesk will suffer a persistent discount to its intrinsic value,” the letter stated.

In October, Zendesk agreed to purchase Momentive in an all-inventory deal price roughly $4 billion. Zendesk’s inventory value fell after the acquisition announcement and remained greater than 20per cent beneath its pre-deal value till Nov. 30, when Jana wrote a letter publicly opposing the plans and urged the corporate to abandon the acquisition.

Other Zendesk buyers, together with Janus Henderson, Neuberger Berman and Florida’s pension system Florida State Board of Administration, additionally stated they’d vote in opposition to the acquisition, citing procedural, strategic and monetary issues.

Proxy advisory corporations Institutional Shareholder Services and Glass Lewis final week suggested Zendesk buyers to vote the deal down.

It is uncommon for Jana to run a proxy contest because the agency has spent greater than 20 years cementing a status for working collaboratively and behind the scenes with goal corporations.

The prospect of a possible proxy fight is already resonating with some buyers.

A portfolio supervisor at a outstanding mutual fund firm, who shouldn’t be licensed to converse concerning the matter publicly, has informed Reuters he would assist changing board members and would additionally like to see administration changed.

(Reporting by Svea Herbst-Bayliss; Additional reporting by Chibuike Oguh; Editing by David Holmes)

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