(Bloomberg) — Janus Henderson Group Plc has come out against Zendesk Inc.’s proposed takeover of SurveyMonkey parent Momentive Global Inc., questioning the deal’s strategic, tactical and financial rationale.
Janus Henderson, which owns a 4.9% stake in Zendesk and is its fourth-largest holder, said in a letter to the company’s board Tuesday that it believed Zendesk would be better served by focusing on its standalone business.
“We believe ZEN’s stock was already materially undervalued primarily to ZEN management’s mis-execution,” Janus portfolio manager Jonathan Coleman and his colleagues said in the letter, referring to the company by its stock symbol. “The decision to acquire a company that has its own mis-execution history, with the belief ZEN management will materially execute better, does not strike us as likely.”
A representative for Zendesk declined to comment.
Zendesk agreed to acquire Momentive in October in an all-stock deal that was valued at about $4 billion at the time. Zendesk shares have fallen 16% since then and Momentive is down 22%, shrinking the value of the deal to about $3.3 billion.
Activist investors Legion Partners, which owns a 1.3% stake in Momentive, and Jana Partners, which owns a stake in Zendesk, have also come out against the deal. The transaction is scheduled for a shareholder vote at both companies on Feb. 25.
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