Exclusive-Anson Funds pushing Five9 to explore a sale, sources say

By Svea Herbst-Bayliss

(Reuters) - Investment firm Anson Funds Management has amassed a stake in Five9 and is urging the U.S. call center software company to consider a sale, people familiar with the matter said.

The investment firm's move comes on the heels of Five9's decision last year to walk away from an acquisition offer from Zoom Video Communications, the maker of the popular virtual meeting software, one of the sources said.

There is no certainty Five9 will heed the calls to explore a sale, the sources said, requesting anonymity because the matter is confidential.

Five9 did not respond to a request for comment and Anson Funds declined to comment.

Five9 ended trading up 4.3% at $41.72 on Thursday, with a market value of roughly $3 billion.

Based in San Ramon, California, Five9 makes cloud software for contact centers. It has more than 3,000 clients and generated revenue in 2023 of $910.5 million.

Zoom inked a $14.7 billion agreement to acquire Five9 in 2021. Five9's shareholders thwarted that deal through a vote because they objected to being paid in Zoom stock. Zoom's shares took a hit as the COVID-19 pandemic eased and employees returned to the office.

Five9 said in December it had received new acquisition interest but that it was no longer exploring it. One of the sources said that the party it was referring to was Zoom.

Since January, Five9 shares have tumbled 45% and Zoom shares are off 18%, as fears about an economic slowdown drove their corporate clients to cut spending.

Anson, which oversees roughly $1.9 billion in assets, last year hired Sagar Gupta from activist investment firm Legion Partners as it works to build out its shareholder activism and engagement strategy. In the first half of the year, the Anson Investments Master Fund LP gained 10.6% after returning 18.2% in 2023, according to an investor update.

Gupta spearheaded Legion's investments in technology, media and telecommunications and joined Anson in October 2023.

Anson's efforts come at a time activist investors are eager to shore up returns during the remainder of the year after posting, in average, meager first-half returns.

Part of that strategy, bankers and lawyers said, is to push companies, especially technology-oriented companies, into considering a sale even at a time mergers and acquisitions activity has been lackluster amid worries about interest rates and regulatory approval.

(Reporting by Svea Herbst-Bayliss; Editing by Lisa Shumaker)