Zoom Video Communications (ZM) - Get Zoom Video Communications (ZM) Report shares moved higher Friday following a report that a shareholder advisory service is recommending Five9 Inc (FIVN) - Get Five9 Inc. Report investors reject the online conferencing group's proposed $15 billion takeover bid.
Institutional Shareholder Services will recommend that Five9 shareholders vote against the takeover at a special meeting on September 30, CNBC reported Friday, as the decline Zoom shares, which traded at four-month low yesterday, now peg its bid price some 23% below the original value.
When the all-stock deal was first proposed in July, Five9 shareholders were promised 0.5533 of a Zoom share for each of their holdings, implying a price of $200.28 each. Today, that bid sits at $154 per share.
Zoom shares were marked 1.75% higher in early trading Friday to change hands at $282.50 each. Five9 shares, meanwhile, jumped 2.6% to $172.50 each.
Zoom is hoping the Five9 takeover will expand its total addressable market, including individual and enterprise customers, by around $24 billion as it is "continuously looking for ways to enhance our platform".
Last month, Zoom said its current quarter revenues would likely slow as smaller companies return to office-based work and schools transition to full-time lessons.
Zoom topped Street forecasts with its second quarter earnings report, notching a bottom line of $1.04 per share on record revenues of $1.02 billion, but said the growth rate of sales going forward would slow significantly from pandemic-peak levels.
Looking into the back half of the year, Zoom said it sees third quarter revenues of between $1.015 billion and $1.020 billion, implying a year-on-year growth rate of around 31.2%, well shy of the 54% second quarter pace and the 191% gain booked over the first three months of the year.