It's been tough times for Zendesk, which has been fending off Jana since the end of last year, when the activist investor began to send the company, which focuses on help desk and ticketing software, a series of complaint letters.
Perhaps it shouldn't come as a surprise that reports surfaced this week that Zendesk is at least thinking about selling.
Zendesk angered Jana when it turned down a $17 billion acquisition offer in February, a deal that, according to a TechCrunch analysis, appeared to undervalue the company. There was also the matter of its $4.1 billion deal to buy Momentive Global, the makers of SurveyMonkey, a deal Jana seemed to despise.
As the investing group wrote in the first paragraph of a letter to the board in February without further introduction:
"The facts could not be more obvious to us: Zendesk, Inc.’s ('Zendesk' or the 'Company') proposed acquisition of Momentive Global Inc. ('Momentive') lacks financial and strategic merit, introduces substantial execution risk and relies on highly questionable synergy and pro forma trading multiple assumptions, all while appearing to be 'out of left field' as the result of an impulsive process."
It's worth noting that Zendesk did not agree. It believed that adding Momentive and SurveyMonkey would expand the company's business in customer experience and create a path to faster revenue growth.
Regardless, Jana also announced in February that it was nominating its own slate for the board of directors. Last month, it filed a note with the U.S. Securities and Exchange Commission outlining its list of complaints as it related to that nomination, and has been pushing Zendesk to hold its annual stockholder's meeting and put the Jana candidates to a vote once and for all.
Zendesk appeared to be working to fend off these attempts, while Jana accused the company of "a reckless disregard for stockholder capital, a seeming readiness to resort to what Glass Lewis called 'questionable reasoning' when challenged by stockholders and a 'ready, fire, aim' process, as well as a history of refusing to engage with interested strategic and financial buyers for the Company," the firm wrote in its SEC filing.
If the reports are true that the company is partnering with Qatalyst Partners about a possible sale, it could be that it's had enough.
Oddly, Jana has a rather small stake in the company -- less than 3% -- for a firm complaining so loudly about how Zendesk is being run, but it was able to rally the troops to scuttle the Momentive deal when 90% of those voting went against Zendesk's plan. It could believe that based on those results, it could ride that shareholder hostility to an outright takeover.
For now, neither Zendesk nor Qatalyst has confirmed their relationship, but given what's been going on with Zendesk, it wouldn't be shocking if it were true.
Investors certainly seem to like the news, with stock up over 6.5% as we published this story.