On Thursday, shareholders of Five9 Inc (FIVN.O) voted down a $14.7 billion sale to Zoom Video Communications Inc (ZM.O), dealing a huge setback to Zoom’s plans to expand its products following the epidemic.
The deal was called off after proxy consulting firms Institutional Shareholder Services (ISS) and Glass Lewis recommended that Five9 shareholders vote against the deal earlier this month, citing growth concerns and dual-class shares as reasons.
Five9 owners would have got 0.5533 Zoom shares for every Five9 shares under the terms of the deal announced in July. Five9 was valued at $14.7 billion under the agreements, which suggested a 12.8 percent premium over its market price. Zoom’s stock has plunged more than 25% since then when the virtual conferencing behemoth revealed weaker growth on its second-quarter results conference.
“The all-stock deal exposes FIVN shareholders to a more volatile stock whose growth prospects have become less compelling as society inches towards a post-pandemic environment,” ISS said in its report earlier this month.
The company is based in San Ramon, California. According to Five9, the merger agreement did not acquire enough shareholder approval votes, and the company will continue to function as a separate publicly traded corporation.
Zoom CEO Eric Yuan said on Thursday that Five9 offers an appealing way to bring an integrated contact center product to consumers.
“That said, it was in no way foundational to the success of our platform nor was it the only way for us to offer our customers a compelling contact center solution,” Yuan added.
Zoom Video Engagement Center, the business’s cloud-based contact center solution, will be available in early 2022, according to the company.
Five9 stated that the partnership with Zoom that existed prior to the announcement would be maintained. As the pandemic slowed, businesses and colleges began to use Zoom’s services to organize virtual classes and office meetings, the company became a household name and an investment darling.
According to a letter filed with US authorities, a US Justice Department-led committee was investigating Zoom’s proposed purchase of Five9 due to probable national security issues, however, analysts last week predicted the deal was unlikely to be canceled as a result.
Five9’s stock slipped 1.1 percent to $157.9 in extended trading on Thursday, after rising 19.3 percent since the acquisition was announced in July.
Customers include Under Armour (UAA.N), Lululemon Athletica Inc (LULU.O), and Olympus Corp (7733.T). Five9’s call center software is utilized by over 2,000 companies across the world.
