Zendesk's multibillion-dollar plan to acquire Momentive, which runs the popular SurveyMonkey tool, fell through after its own shareholders rejected the proposal.
The deal was worth around €4.1bn, with the news breaking just days after the CRM giant turned down a €16bn bid to be acquired by a consortium of private equity firms.
“While we are excited about the potential of this transaction to transform the customer experience and create shareholder value, we respect and value the perspectives of our shareholders,” said Zendesk CEO Mikkel Svanek.
failed auction
In a blog post, Svanek explained a bit more about what made Momentive such an attractive target and Zendesk's future plans. Zendesk's business is healthy, he said, but it could have been boosted by Momentive.
"We plan to acquire Momentive to accelerate our ability to deliver the future of customer intelligence," he wrote. "While we are not moving forward with this acquisition, we remain more committed than ever to helping our customers get the most from their data."
Investor Hostility
The deal was largely scuttled by activist shareholders who opposed it. The Wall Street Journal reported that Jana Partners, which owns 3%, and Janus Henderson, who owns 5%, opposed the deal. Jana called it an "impulsive, reactive decision."
Given the skepticism of its own shareholders, spending 4.100 billion dollars is an impossible request. Shareholders voted against the deal on February 25.
For Momentive, the decision is not ideal. "While we are disappointed that Zendesk shareholders did not vote to approve the transaction, we are confident in our strategy going forward," Monentive CEO Zander Laurie said.
Which direction the two companies will take remains to be seen, but with intense pressure in the CRM market, Zendesk must come up with a bold new plan.