Risky bromance
CEOs’ selfie puts $4B ‘Zen’ merger on the rocks
COULD a selfie sink a $4 billion deal? Angry shareholders are questioning whether an unpopular software merger amounts to a sweet heart deal between two CEO buddies — and they’re pointing to a smiling selfie that the pair posted on Twitter, On The Money has learned.
Zendesk, a customer support software maker, said in October that it plans buy Survey Monkey parent company Moment ive in a $4 billion all stock deal. The move baffled some analysts, who argued that it doesn’t make sense for Zendesk — which is bigger than Moment ive and growing at a faster rate—to absorb a smaller, slower firm.
Now, as shareholder votes on the acquisition approach in early 2022, some shareholdersare crying foul over a personal friendship between the CEOs of Zendesk and Momentive that they say has created a conflict of interest.
Just after the deal was announced, Zendesk cofounder and CEO Mikkel Svane posted a little-noticed photo of himself smiling alongside Momentive CEO Zander Lurieon Twitter.
“Big thank you to @zlurie for being an outstanding CEO of Momentive,” wrote Svane.“An inspiring leader. A gentleman. And most of all a good friend over the last 18 months.” He finished the tweet with a kissing emoji.
Activist investor Legion Partners, which owns about 1.4 percent of Momentive, slammed Svane and Lurie’s friendship in an investor letter last week that included a link to the pair’ ss elfie.
“Lurie and Svane have a very public and close relationship as disclosed on Mr. Svane’s Twitter account — what should have been an obvious and clear conflict was seemingly overlooked by a Board that appears to value its relationship with fellow Silicon Valley insiders over the stockholders they purportedly represent,” Legion Partnerswrote.
Jan a Partners, a big Zen desk investor led by Barry Rosen stein, wants the deal nixed.
“Was this motivated by the Zendesk CEO’s personal friendship with the CEO of Moment ive ?” wrote Jan a Partners ina scathing November letter. “Or is the board simply not sufficiently engaged to appropriately safeguard shareholder interests ?”
Zendesk and Momentive did not respond to requests forcomment.