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Zendesk rejects $16 billion offer from private equity consortium

By Reuters

– Zendesk Inc, the software company under activist shareholder pressure to abandon its $3.9 billion all-stock acquisition of the parent of online survey portal SurveyMonkey, said on Thursday it had rejected an acquisition offer from a consortium of private equity firms for as much $16 billion.

The offer from the private equity firms, which Zendesk did not identify, was in the range of $127 to $132 per share in cash, the San Francisco-based company said. Zendesk shares jumped 10.7% on Thursday to close at $114.18.

Zendesk said its board concluded that the non-binding proposal, which does not require it to abandon the SurveyMonkey deal, significantly undervalued it.

The company is facing calls from activist investors, including hedge fund Jana Partners LLC, to abandon its proposed acquisition of SurveyMonkey parent Momentive Global Inc <MNTV.O>, which it agreed in October.

Jana has called Zendesk’s plan to buy Momentive a “reactive and impulsive decision”.

Zendesk shareholders are scheduled to vote on the Momentive deal on Feb. 25. The Wall Street Journal reported on Thursday that Jana was preparing to nominate four directors to the company’s board and that Thoma Bravo had made a takeover approach to Zendesk.

Thoma Bravo is one of the private equity firms that has expressed interest in Zendesk but is not part of the private equity consortium that made the offer the company rejected, a person familiar wirh the matter said. Thoma Bravo and Jana declined to comment.