IT management solutions provider Quest Software, Inc. (QSFT: Quote) said Thursday it is in receipt of another proposal from an unnamed 'strategic bidder' to acquire it for $27.50 per share in cash, with the board deeming it to be a superior proposal. Quest shares are surging nearly 6 percent in Monday's pre-market trading to match up with the latest offer price.
The latest offer tops last week's sweetened $25.75 per share all-cash offer made by Insight Venture Partners to out bid the $25.50 per share bid from a "strategic bidder", which was reportedly confirmed as being Dell, Inc. (DELL). A Dell spokesman declined to comment.
While sweetening its offer, Insight Venture also added private equity firm Vector Capital as a member of the buyout group.
Aliso Viejo, California-based Quest had originally agreed upon $23.00 per share 'going private' deal with Insight Venture Partners in early March that valued Quest at about $2.0 billion. The deal was then also unanimously approved by Quest's board, and was recommended to its stockholders to vote in favor of the deal. The board has not changed its recommendation yet.
The latest $27.50 per share offer reportedly values Quest at about $2.32 billion, and represents 41.8 percent premium to Quest's unaffected closing price of $19.40 on April 8. The offer is also a 20 percent jump from the initial offer of $23.00 per share.
Quest noted that the latest offer is fully negotiated, and the agreement is subject only to execution by the company. The proposal is also not subject to any financing contingencies. Meanwhile, Insight will now have three business days to match the superior offer.
The original agreement with Insight provided Quest with a 60-day go-shop provision that allowed it to solicit and consider alternative offers. The deal also called for Quest to pay a $4.2 million break-up fee if the deal is terminated due to receipt of a superior offer. However, the break-up fee increases to $6.3 million after the end of the go-shop period.
Founded in 1995, Insight Venture Partners is a leading private equity and venture capital firm focused on the global software, infrastructure software, Internet and data-services industries.
QSFT closed Friday's regular trading session at $26.22, down $0.16 on a volume of 2.94 million shares, higher than the three-month average volume of 1.26 million shares.
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by RTT Staff Writer
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