Permira Bid for SurveyMonkey Parent Before Zendesk Deal

(Bloomberg) -- Private equity firm Permira was among final bidders for Momentive Global Inc. before the parent company of SurveyMonkey agreed to sell for $4.13 billion to Zendesk Inc. last month in an all-stock deal, according to people familiar with the matter. 

Permira’s offer was all-cash, which is typical for private equity, the people said, asking not to be identified because the matter is private. While Momentive’s shares have fallen sharply since the deal was announced, Permira is not expected to continuing pursuing the company, they added. It’s not clear how much Permira offered. 

Representatives for Permira and Zendesk declined to comment. A representative for Momentive referred Bloomberg News to a previous statement it made about the deal this month. 

Zendesk agreed on Oct. 28 to pay the equivalent of about $28 per share for Momentive. The stock has fallen about 11% since then while Zendesk has fallen 16%, following several analyst downgrades. That’s wiped out about $700 million off the purchase price. 

Two Momentive shareholders have already come out against the terms of the deal, and raised questions about the quality of the sales process, including activist investor Legion Partners Asset Management. Legion, which owns a 1.4% stake in Momentive, has also said the board of the company is in need of a “significant upgrade.”  

Momentive has said the decision to pursue a sale to Zendesk came after a “robust and comprehensive” review. It said the takeover would allow shareholders to participate in the upside of a stronger and larger company, and that it was committed to engaging with shareholders to ensure they recognize the value of the combination. The agreement does not include a go-shop provision, meaning it can’t solicit other buyers. The deal also requires shareholder votes for both Zendesk and Momentive. 

Zendesk’s top brass will be talking up the merits of the deal during its investor day on Nov. 18.

At least one Zendesk shareholder was taking advantage of the dip in Zendesk shares to add to its position. 

Capital World Investors disclosed in a filing Wednesday that it now owned more than 14.7 million shares, up from 4.8 million as of June 30. It now has a stake of more than 12%, making it Zendesk’s largest shareholder, according to data compiled by Bloomberg. 

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