Zoom's acquisition of cloud-based contact center software provider Five9 came to a halt late yesterday afternoon after Five9's shareholders outright rejected the deal. While Five9 initially was ecstatic about Zoom’s all-stock offer in July that amounted to a massive $14.7 billion dollar buyout offer; poor stock market performance made the acquisition less appealing. Shareholders of Five9 cited too small a premium payout as the reason for rejecting the offer.
In the initial offer, Five9's shareholders were to receive 0.5533 shares of Zoom for each share of Five9. The valuation at the time amounted to approximately $200 a share, or roughly $14.7 billion total. Zoom has slid 28% in the stock market since the offer was presented, however, and the Five9 board felt their company was worth more- even after Zoom’s initial 13% premium offer on stock prices.
“Even though Five9’s board voted against the acquisition of Zoom,” said Joe Rittenhouse, President of Business Development at Converged Technology Professionals, “I still believe this is a strong signal for the UC industry in general. It makes it very clear how important the digital contact center is in today’s society.”
While it may be uncommon for shareholders to walk away from a deal of that magnitude, it is entirely possible that the final chapter to this potential acquisition has not yet been written. There was another element in play here with the Justice Department reviewing the merger for potential US national security risks, which may have partially contributed to those dips in stock prices. Do not be surprised if another offer is just around the corner- potentially without a record-breaking stock swap as the only compensation.
“Great things come from industry giants working together for the benefit of the entire industry,” added Chris Frey, the VP of Cloud and Contact Centers at Converged. “Just look at the recent contract extension between RingCentral and NICE. It forces the rest of the industry to adapt and deliver even better features for us to connect with our clients.”