Thursday, June 14, 2012

Quest Software (Nasdaq: QSFT) Lands Bigger Offer, Bidding War May Be On

Quest Software (Nasdaq: QSFT) Lands Bigger Offer, Bidding War May Be OnShawshank, VA 6/14/12 (StreetBeat) – Quest Software’s (Nasdaq: QSFT) search for a better buyout has proved fruitful and it now might find itself in a bidding war.

The maker of software for managing databases said it has received an offer from an unnamed party at $25 a share, valuing the whole company at $2.11 billion. All Quest says about the buyer is that it is a “strategic” bidder.

This comes after Quest had agreed to a $2 billion buyout by venture capitalists Insight Venture Partners in March.

That deal came with a 60-day go-shop period in which Quest said it had discussions with several strategic and financial parties that were likely to lead to superior proposals. Though no deal was reached by the end of the allowed period, Quest warned discussions would continue.

Bloomberg News at one point reported that Dell, which has made several purchases this year, was in discussions, but then Reuters reported those talks were breaking down.

The new offer was high enough that Quest deemed it “superior” but has not yet recommended the offer, as Insight has the right to match the proposal in the next three business days.

Shareholders are assuming more is coming. Shares jumped 8.2% to $25.81 in premarket trading, as the market looks ready for a good-old fashioned bidding war in the software space.

There had been some surprise when Quest unveiled its first offer at a relatively slim 19% premium to shares.

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