Asset manager Neuberger Berman said on Monday it remained unconvinced Zendesk should buy Momentive Global for $4 billion even after engaging with the software firm's management, joining prominent investors who questioned the merits of the deal.
Neuberger said it had concerns over valuation and potential growth of the combined company and believes there is a significant risk Momentive would dilute Zendesk's growth, despite management assurances. "Overall, we struggle to understand the appropriateness of this transaction given Zendesk's compelling and undervalued standalone business. The Momentive deal does not appear to be an attractive risk-reward alternative to the organic growth pathway," it said.
Proxy advisory firms Institutional Shareholder Services and Glass, Lewis & Co last week advised Zendesk investors to vote against a planned takeover of the SurveyMonkey parent, while activist investors Janus Henderson and Jana Partners have also opposed the all-cash deal announced in October. Neuberger added that a stand-alone Zendesk could command a premium valuation on its own based on its organic growth opportunities.