Five9 stockholders veto Zoom's $14.7 billion takeover offer

The deal was voted down in a Five9 shareholder meeting on Thursday

Zoom has announced the cancellation of its $14.7 billion (£11 billion) acquisition of cloud contact centre software provider Five9.

The deal, which was expected to be the largest takeover for Zoom to date, was “mutually terminated” less than three months since it was announced.

Five9 failed to secure sufficient stockholder support, who voted down the deal in a shareholder meeting on Thursday, according to Reuters. The rejection was motivated by growth concerns as well as the dual-class shares: under the acquisition terms, Five9 shareholders would have received 0.5533 worth of Zoom shares for every Five9 share.

Five9 CEO Rowan Trollope said that Five9 engaged “extensively” with its shareholders since the deal was announced in July.

“We greatly appreciate their feedback and confidence in Five9’s future prospects and share their views regarding the significant potential for value creation as a standalone company,” he added.

The acquisition of Five9 was set to help Zoom enter the contact centre market, which is expected to reach $75.5 billion by 2026 – a Compound Annual Growth Rate (CAGR) of 20.9% since 2020. This would provide the company with a new source of revenue as demand for video conferencing stifles due to workers returning to offices.

“The contact centre market remains a strategic priority for Zoom,” announced CEO Eric S. Yuan, adding that Zoom is “confident” in its “ability to capture its growth potential”.

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The company is set to launch its own cloud-based contact centre solution, Zoom Video Engagement Center, at the beginning of next year. It is also planning to “maintain [its] valued existing contact centre partnerships” with Five9, Genesys, NICE inContact, Talkdesk, and Twilio.

Yuan said that the company remains “focused on driving long-term value creation for Zoom shareholders and delivering happiness to our customers through our broad-based communications platform including unified communications, developer, and events solutions”.

The now-cancelled $14.7 billion deal was previously scrutinised by the US Justice Department on the basis of potential risks to “the national security or law enforcement interests”, according to Reuters.

Zoom's stock dropped over 25% since it announced the acquisition in July. At closing time on Thursday, the company’s shares were up by 1.59%, while Five9’s fell by 1.23%.

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