Five9 shareholders have voted against the sale of the $14.7 billion call center software company to Zoom Video Communications, which deals a severe blow to Zoom’s plan to expand its offerings and sources of income after the boom it witnessed during the pandemic period, which will begin to slow down with the introduction of vaccines and the gradual return of the lifestyle.
The cancellation of the deal, which would have been the largest acquisition for Zoom, follows recommendations from advisory services Institutional Shareholder Services (ISS) and Glass Lewis earlier this month for Five9 shareholders to vote against the deal citing concerns about growth and the inclusion of shares in double classes, which will deprive them of the right to vote after the merger of the two companies.
The deal announced in July states that Five9 shareholders will receive 0.5533 Zoom share for each share of their company’s stock, which was 12.8% higher than Five9’s share price at the time, giving it a valuation of $14.7 billion, to read more [Zoom Buys Call Center Operator Five9 For $15 Billion], and since then, Zoom’s stock has plunged 25% after the virtual meeting giant’s business growth slowed in its second quarter.
Five9 stated that the merger did not receive enough approval votes from its shareholders, so it will continue to operate as an independent company traded in the stock market, knowing that it represented an attractive way for Zoom to provide integrated services to call centers, while Zoom, for its part, said recently that it will launch the Zoom Video Engagement Center in early 2022, which will be a cloud-based communications solutions center, and Five9 stated that it will complete its partnership with Zoom that it had previously made before the deal.
Five9’s stock, which has grown by 19.3% since the deal was announced in July, fell 1.1% to $157.9 in extended trading.