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Zoom Video Communications bids to buy cloud software provider Five9 US Department of Justice National security concerns were raised about the $ 14.7 billion transaction, and shareholders were advised to vote against acquisitions by strong proxy groups.
The two companies announced on Thursday that they have decided to terminate the deal following a shareholders’ meeting hosted by Five9. Meanwhile, the majority of investors said they were against the deal.
“Since the announcement of the transaction, we have had the opportunity to interact extensively with our shareholders. We appreciate the feedback and confidence in the future outlook for Five 9 and share our views on the great potential of value creation as an independent company.” Rowan Trollope, Chief Executive Officer of Five 9, said.
The decision to end the acquisition is a blow to Zoom, which wants to expand its offering following the huge success of the video conferencing service during the pandemic. The deal with Five9, the largest acquisition to date, was hampered by slumping stock prices and regulatory concerns.
Earlier this month, the Justice Department suggested that Zoom’s link to China needs further investigation before the transaction is approved.
Zoom relies on a large base of Chinese-based developers that US authorities have long been concerned about, fearing it could jeopardize the security of video carriers’ services.
The San Jose, Calif.-based company admitted last year that it misrouted some calls via China, but reiterated that customer data does not go through China-based servers. ..
Zoom CEO Eric Yuan wrote in a blog post that Five9 “provided an attractive way to bring integrated contact center products to customers,” but “it’s the basis of the platform’s success.” We provide attractive contact center solutions to our customers. “
All stock trading Announced in July Initially, Five9 shares were valued at $ 200.28 each and investors were set to receive 0.5533 shares of Zoom Class A common stock. However, Zoom’s share price fell 26% for fear that video conference services would become less popular as workers returned to the office.
Earlier this month, agency advisory firm Instituteal Shareholder Services quoted concerns about Zoom’s growth and advised Five 9 shareholders to vote against the deal.
In another announcement, Five9 said it would host Virtual Finance Analyst Day on November 18th to discuss its outlook and strategies.
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Zoom and cloud company Five9 abandon $14.7bn deal Source link Zoom and cloud company Five9 abandon $14.7bn deal
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