By Svea Herbst-Bayliss

BOSTON, (Reuters) – Jana Partners, an activist investor, is making it more difficult for Zendesk (NYSE) to stop plans to purchase Momentive Global (the parent company of SurveyMonkey). She claims that the deal would be too costly and shareholders are opposed to it.

Jana stated that new documents have shown that Momentive was acquired only after Momentive’s advisors reached to Zendesk in August 2021. Jana, in a letter addressed to the board and seen by Reuters, stated that this acquisition does not seem to have been part of a well-thought strategy.

Zendesk is owned by a New York-based company. The letter also criticised Zendesk’s plan to issue equity at a fair price of approximately $6 billion to Momentive shareholders in order to close the deal.

Zendesk purchased Momentive for $42 billion in an all stock deal in late October.

Zendesk representatives were not available immediately for comment.

The letter stated that Zendesk decided to issue equity shares at an “artificially low price” after reporting strong earnings. Jana refers to Zendesk’s financial adviser, Goldman Sachs, (NYSE:), which calculated Zendesk’s fair worth at $176 per Share, which is $103 per share during early trading on Monday.

Jana believes that even though a deal is made, it will not pay off. She wrote that the transaction would only add about 1% to Zendesk’s top-line growth and 10% to its future stock price.

According to the letter, “Zendesk’s proposed acquisition (of Momentive) appears to be an impulsive and reactive decision.” Jana said it wants Zendesk to stop wasting time and money on a deal that it expects shareholders to reject and urged the board to “immediately terminate the transaction and pivot to focusing on far more promising avenues to resolve Zendesk’s growing discount.”

Jana wrote Jana’s letter in response to Zendesk’s preliminary proxy filed in December, approximately one month following Zendesk’s push for the board against the agreement.

Zendesk shareholders and Momentive investors must agree to the deal. Voting is scheduled for late February/early March.

Jana Partners stated that it had been in contact with additional shareholders, and on Monday wrote: “It should be now be glaringly evident to Zendesk’s board that shareholders don’t support the proposed acquisition.”