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Slack Dips After DOJ Seeks More Data on Salesforce Merger

The Justice Department wants more information on Salesforce's proposal to buy Slack. Salesforce still hopes to close the deal in the quarter ending July 31.
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Slack Technologies  (WORK)  shares were lower after  (CRM)  said the Justice Department's Antitrust Division was seeking additional information from the companies regarding their proposed $27.7 billion agreement to combine.

Slack shares at last check were off 2.5% to $43.17 while Salesforce was down 0.7% at $246.88.

In a regulatory filing Salesforce that the San Francisco companies had "each received a request for additional information and documentary material."

"The company and Slack have and will continue to cooperate fully with the DOJ in its review," Salesforce said in the filing. 

Salesforce said it still continues to expect to close the acquisition in the quarter ending July 31.

"We’ve appreciated our constructive dialogue with the Department of Justice and look forward to it continuing,” a Salesforce spokesperson told CNBC in an email.

“We strongly believe this transaction will be transformative for customers and the industry and will enable companies to grow and succeed in this all-digital, work-from-anywhere world.”

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Salesforce said in December that it would buy Slack for cash and stock in a deal valued at $27.7 billion.

The acquisition will combine Slack, a prominent messaging platform, with Salesforce, which makes productivity tools used by companies to improve sales and services.

Under the terms, Slack holders would receive $26.79 cash and 0.0776 share of Salesforce for each Slack share.

Meanwhile, Mizuho analyst Gregg Moskowitz raised his price target on Salesforce to $290 from $275, while affirming a buy rating on the shares.

Moskowitz said his recent checks indicate healthy overall demand trends for software through January. Companies that enable digitization are still leading the way, he said, although many legacy and on-premises technologies continue to normalize.

Slack has been facing increased competition from Microsoft  (MSFT) , which has seen rapid uptake of its Teams app. Teams offers tools similar to those of Slack. 

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