Zendesk’s (ZEN) proposed acquisition of SurveyMonkey parent Momentive Global (MNTV) has been opposed by Janus Henderson Group (JHG), according to Bloomberg. JHG has questioned the deal’s strategic, tactical, and financial rationale. ZEN shares rose 1.49% to close at $101.95 on January 12.
Zendesk is a U.S. company that provides a platform allowing companies to offer customer support. Its products and services include support, guide, chat, talk, and message, among others. Zendesk’s earnings report for Q4 2021 is scheduled for February 10, 2022.
Momentive Acquisition
Opposition to the proposed takeover comes on the heels of Zendesk reaching an agreement to acquire Momentive for about $4 billion. Since the deal was announced last October, Zendesk shares have dropped by about 16%, with Momentive shedding about 22% in market value.
Janus Henderson, Zendesk’s fourth-largest shareholder with a 4.9% ownership stake, says the company would be better off focusing on its standalone business. In a letter to the board of directors, Janus Henderson says ZEN stock was already materially undervalued, and acquiring a company with a history of miss-execution could be detrimental.
Janus Henderson is not the only one opposed to the deal. Activist investor Legion Partners, which owns a 1.3% stake in Momentivey, and ZEN shareholder Jana Partners, have also come out against the proposed takeover. A shareholder vote scheduled for February 25 could decide the transaction’s fate.
Stock Rating
In November, Cowen & Co. analyst Derrick Wood downgraded Zendesk stock to a Hold from a Buy and cut the price target to $115 from $140, implying 12.80% upside potential to current levels.
Consensus among analysts is a Moderate Buy based on 8 Buys and 8 Holds. The average Zendesk price target of $133.50 implies 30.95% upside potential to current levels.
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