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Zendesk punished by investors after vowing to remain independent


The Zendesk ownership saga took several new turns this week, with an external investor, Jana Partners, agitating against the company, a review of its strategic options coming to a close, and the business software company Zendesk has made more noise in recent months than you would expect from a company of its size. But after announcing that it would buy Momentive (SurveyMonkey) for more than $4 billion last year, Zendesk has been in a bruising fight with external investors that has proven to be recurring headline fodder.
Even though Jana threat of a lawsuit if Zendesk failed to call a stockholder meeting immediately.
Jana wants Zendesk to sell. Earlier this year, Zendesk turned down a $17 billion offer to sell the company, which, as we wrote at the time, “angered” Jana. The offer came from a consortium of private equity firms, and it is easy to imagine why founder and CEO Mikkel Svane, who built Zendesk from scratch, did not want to take that route. Emotion aside, an analysis by TechCrunch at the time concluded that the deal undervalued the company.
That Zendesk wound up in a sale process of sorts should not surprise. We’ve seen some big enterprise deals in the last couple of years, including Broadcom’s recent announcement to buy VMware for $61 billion, which is still under a go-shop provision and subject to regulatory scrutiny. Prior to that, some big software deals that closed include Salesforce buying Slack for almost $28 billion, Oracle buying Cerner for the same price, and Microsoft buying Nuance Communications for $19 billion
It’s worth noting that the above deals happened in a different economic environment. Whether it’s warranted, markets have retreated and VC dollars are getting tighter. Valuations are down all around. As such, it would make sense that even if Zendesk wanted to sell itself, now may not be a particularly good time to do it.
The company agrees. Zendesk had a chance to take the money and run, but it believed it was actually worth more than the offer — at least at the time. Does the spurned $17 billion offer from earlier this year appear more attractive in light of continued declines in the value of technology companies? Sure, but enough to put the decision to decline in doubt? Let’s find out. …

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