Zendesk (ZEN) Stock Falls as Takeover Seen as 'Less Likely'

Zendesk (NYSE: ZEN) shares are trading more than 5% lower in mid-day trading Wednesday after CNBC's David Faber reported that a takeover of the company by private equity firms is looking "less likely."

Late last year, Zendesk announced a deal to acquire SurveyMonkey parent Momentive Global but in February 2022 shareholders voted down the deal and it was subsequently terminated. The company then became the target of activist investors, including JANA Partners, and a takeover itself.

Also in February, Zendesk rejected an up to $16 billion acquisition offer from a consortium of private equity firms and has since hired Qatalyst Partners to explore a potential sale.

Faber explained that "club" deals involving multiple private equity firms are often difficult to put together and in the case of Zendesk, "people seem to have put their pencil downs." He added that this is not due to the financing markets, but more due to the complexity of organizing the deal itself.

"I've heard it enough, people who would be aware of what was going on, to give you a sense that this one looks less
likely," Faber concluded.

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