Quest Software (NASDAQ:QSFT) revealed the existence of a $2.14 billion takeover offer from a mystery bidder on Thursday that would trump the software company’s previously-agreed to leveraged buyout.
The disclosure gives private-equity firm Insight Venture Partners three days to respond with a more lucrative bid otherwise Quest said it will terminate the Insight agreement.
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The $25.50-a-share offer from the undisclosed new party represents a 10.9% premium on Insight Venture’s $23-a-share bid, which was first announced in March.
The Insight Venture tie-up allowed Quest Software a 60-day “Go Shop” period during which the enterprise systems management software provider could solicit more lucrative buyout bids.
Quest, which is based in Aliso Viejo, Calif., and has nearly 4,000 employees, said its board received a number of proposals and determined the newly-announced one to be “superior.”
It’s not clear who the mystery bidder is for Quest, which simply described the company as a “strategic bidder.” Quest competes directly or indirectly with a number of public tech companies, including Oracle (NASDAQ:ORCL), Microsoft (NASDAQ:MSFT) and CA (NYSE:CA).
Quest also said that should shareholders not support the new bid, the company has agreed to give the bidder an option to buy 20% of its outstanding shares and supply a break-up fee of 2% or 3.5% of the proposed deal’s worth.
Wall Street seems to believe an even higher bid could emerge, bidding shares of Quest above the $25.50 mystery offer price. Quest was recently up 7.92% to $25.76.