Influential proxy service ISS is said to recommend Zendesk ( NYSE: ZEN ) holders vote in favor of the company's sale to Hellman & Friedman and Permira Advisers.
ISS sees downside risk if Zendesk ( ZEN ) holders don't approve $77.50/share sale to private equity consortium, according to traders, who cited Bloomberg headlines.
The ISS recommendation comes ahead of Sept. 19 vote for Zendesk holders on the planned sale. It also follows after Zendesk ( ZEN ) holder Light Street Capital last Monday said i t's opposed to the company's planned sale to Hellman & Friedman and Permira Advisers and wants the company to expand its board and replace its CEO.
Light Street, which has over a 2% stake in Zendesk ( ZEN ), proposed an alternative to the sale including a recapitalization of the business consisting of a $2 billion preferred equity investment arranged by Light Street and a $2 billion incremental debt facility. The investor also proposed a $5 billion company-led tender offer at $82.50 per share for shareholders who would like to sell their shares.
The Light Street opposition comes after activist investor Jana Partners, which had been pushing Zendesk ( ZEN ) for months to sell itself, dropped its proxy battle with the company in late June after the sale was announced. Jana withdrew its four nominees for the ZEN board after the customer-support software company agreed to be sold to a private equity consortium for $77.50/share .
Zendesk ( ZEN ) earlier Tuesday released a new investor presentation and reiterated that its board believes the sale to the consortium is the "best path forward" for company and its holders.
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Proxy service ISS said to recommend Zendesk sale to consortium