Zoom, Five9 to terminate nearly $15 billion all-stock deal after shareholder vote

The full version of the article, along with thousands like it, can be found here: Zoom, Five9 to terminate nearly $15 billion all-stock deal after shareholder vote

Five9 Inc shareholders voted down the call center software firm's $14.7 billion sale to Zoom Video Communications Inc, a major blow to Zoom's plan to expand its offerings following its pandemic boom.

The termination of what would have been Zoom's biggest-ever acquisition comes after proxy advisory firm Institutional Shareholder Services (ISS) and Glass Lewis earlier this month recommended that Five9 shareholders vote against the deal, citing growth concerns and dual-class shares.

Under the deal terms announced in July, Five9 shareholders would have received 0.5533 Zoom share for every Five9 share. The terms implied a 12.8% premium over Five9's market price and valued the company at $14.7 billion.

Since then, Zoom's stock has dropped over 25% as the virtual conferencing giant reported slower growth on its second-quarter earnings call.

"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.

San Ramon, California-based Five9 said the merger agreement did not receive enough approval votes from its shareholders, and it will continue to operate as a standalone publicly traded company.

Five9 presented an attractive means to bring to customers an integrated contact center offering, Zoom Chief Executive Officer Eric Yuan said on Thursday.

"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.

The company said it would launch Zoom Video Engagement Center, its cloud-based contact center solution, in early 2022.

Five9 said it would continue the partnership with Zoom that was in place prior to the announcement.

Zoom became a household name and an investor favorite as the pandemic clamped down on activity and businesses and schools adopted its services to hold virtual classes and office meetings.

But with rapid vaccination and life creeping back to normal, Zoom was looking for revenue sources beyond its core video conferencing business, which faces stiff competition from rivals Microsoft, Cisco Systems Inc and Salesforce's Slack.

A US Justice Department-led committee had been reviewing Zoom's proposed purchase of Five9 over possible national security concerns, according to a letter filed with US regulators, though analysts last week said the deal was unlikely to be scrapped as a result.

Zoom's connection with China has been scrutinized in recent years.

Five9's shares, which gained as much 19.3% since the deal was announced in July, fell 1.1% to $157.9 in extended trading on Thursday.

Five9, whose call center software is used by more than 2,000 clients across the globe, counts firms such as Under Armour, Lululemon Athletica Inc and Olympus Corp as customers.

The team at Platform Executive hope you have enjoyed the '[post_title]' article. Automatic translation from English to a growing list of languages via Google AI Cloud Translation. Initial reporting via our official content partners at Thomson Reuters. Reporting by Subrat Patnaik in Bengaluru and Krystal Hu in New York. Additional reporting by Uday Sampath Kumar. Editing by Shounak Dasgupta and Leslie Adler.

You can stay on top of all the latest developments across the platform economy, find solutions to your key challenges and gain access to our problem-solving toolkit and proprietary databases by becoming a member of our growing community. For a limited time, our subscription plans start from just $16 per month.

This news article was published by Platform Executive, the home of the platform economy.

If you enjoy the content then please post a link on your website, or share on social media to help us get the word out.

Zoom, Five9 to terminate nearly $15 billion all-stock deal after shareholder vote posted first on https://www.platformexecutive.com/