Cloud Computing: Dell Reportedly Offers $2.15 Billion for Quest
June 18, 2012
Quest Software said last Thursday that it got an acquisition offer worth about $2.15 billion from an unidentified "strategic bidder."
Reuters claims the unidentified mystery bidder is Dell after talks to buy Quest broke down earlier.
The $25.50-a-share cash offer bests the $23 a share Quest accepted back in March from private equity house Insight Venture Partners. Insight has to sweeten its offer or let it go for a break-up fee of either $4.2 million or $6.3 million…
Wall Street punters pushed the stock up ~10% betting it could go for better than $26 a share. JP Morgan has said the company is worth $28 a share or around $2.36 billion.
Quest reportedly got several offers during the 60-day "go-shop" arrangement it struck with Insight to see if it could fetch a better price.
Quest says the new deal is locked and loaded, waiting for Quest to execute it. If the Quest shareholders who agreed to sell to Insight turn down the better offer, it’s cut a side deal that would grant the mystery bidder the right to buy new shares equal to 19.9% of the company or a break-up fee equal to 3.5% of the "transaction value if the proposed merger agreement is terminated under certain circumstances, or a break-up fee of 2% of the transaction value if the proposed merger agreement is terminated because the superior proposal is not approved by the vote of the company’s stockholders."
Quest, which partners with Dell, makes an odd assortment of enterprise management software including databases, backup, VM replication, application performance monitoring, identity and Windows Server management tools. Started in 1987, it claims 100,000 customers worldwide.