Zendesk in talks to settle with activist investor Jana Partners

Zendesk Inc. is in talks to settle with activist investor Jana Partners LLC, days after the software company ended an unsuccessful bid to sell itself.

Zendesk and Jana are discussing a truce that could involve Mikkel Svane stepping down as the software company’s chief executive, as well as changes to the board, including the removal of director Carl Bass, according to people familiar with the matter. The situation is still fluid and the men could still remain in their roles, some of the people said.

A deal could be completed within weeks, assuming the talks don’t fall apart, the people said.

Bass, the former president and CEO of Autodesk Inc., is Zendesk’s lead independent director as well as chair of the board’s compensation committee.

Jana, which has a roughly 2.5% Zendesk stake, according to FactSet, has been agitating at the company since earlier this year. The Wall Street Journal reported in February that a group of private-equity firms had made a takeover approach to Zendesk that would value it around $17 billion. Zendesk’s market value was around $7 billion based on Tuesday’s closing price after the sharp selloff in technology and other stocks.

Shares in Zendesk rose roughly 5% in after-hours trading after the Journal reported on the settlement talks.

Zendesk’s shareholders subsequently voted down its planned acquisition of SurveyMonkey parent Momentive Global Inc. by a wide margin, forcing the company to abandon what would have been a roughly $4.1 billion deal.

The company was lately in advanced talks with a private-equity consortium for weeks, people familiar with the matter have said. But those talks stalled and the company said Thursday it was ending its strategic review and remaining independent.

Jana had criticized the Momentive deal and nominated four directors to Zendesk’s board. The activist could still run a proxy fight if the settlement talks fail. It previously urged Zendesk to set a date for its annual meeting before the June deadline to do so and said it was prepared to sue if needed. Zendesk has since set the meeting for Aug. 17.

Zendesk specializes in helping companies with customer communications and says on its website it has over 160,000 paid accounts and more than 6,000 employees. It was founded in 2007 and is based in San Francisco. Wall Street Journal