The development comes after proxy advisory firm
Institutional Shareholder Services earlier this month recommended Five9
shareholders vote against the deal, citing growth concerns.
“The agreement did not receive the requisite number of votes
from Five9 shareholders to approve the merger with Zoom,” San Ramon,
California-based Five9 said.
“Five9 will continue to operate as a standalone publicly
traded company.”
A U.S. Justice Department-led committee was also reviewing
Zoom’s proposed all-stock deal to buy Five9, according to a letter filed with
U.S. regulators.
The Aug. 27 letter filed with the Federal Communications
Commission said the Committee for the Assessment of Foreign Participation in
the United States Telecommunications Services Sector was reviewing to see if
the deal “poses a risk to the national security or law enforcement interests”.
Analysts had said the deal, Zoom’s biggest to date, may be
delayed by a U.S. Justice Department-led committee review but was unlikely to
be scrapped.
Five9 said it would continue the partnership with Zoom that
was in place prior to the announcement.