(Reuters) -Zendesk Inc’s investor Light Street Capital Management said on Monday it will vote against the software company’s $10.2 billion deal to go private and instead proposed that Zendesk (NYSE:) remain a standalone public company and find a new Chief Executive Officer.
Light Street, which manages funds that own more than 2% shares of Zendesk, said the deal struck with investment firms led by Hellman & Friedman and Permira undervalues the San Francisco-based company.
The investor’s move marks another turn in the saga, which started with Zendesk’s failed takeover of SurveyMonkey parent Momentive Global Inc in a $3.9 billion deal.
After persistent pressure from activist investor Jana Partners, Zendesk had agreed to the sale of the company in June.
In a letter to the board on Monday, Light Street proposed a recapitalization of the business, consisting of a $2 billion preferred equity investment arranged by Light Street and a $2 billion incremental debt facility.
“We are not activists; we are fundamental investors who are confident in Zendesk’s long‐term potential,” Light Street said in the letter.
Light Street added Zendesk should expand the board to ten seats and include five directors from Light Street and other preferred equity shareholders, and form a committee to search for a successor to CEO Mikkel Svane.
“The skills required to drive Zendesk to over $1 billion of revenue are different than the skills needed to drive Zendesk to $1 billion of operating profit over the next phase in its journey,” Light Street said and added it wanted to move Svane to the role of chairman.
Zendesk, which makes communication software for businesses, did not immediately respond to a Reuters request for comment.
The investment firm also suggested the company issue a $5 billion tender offer at $82.50 per share for shareholders who would like to sell their shares.