This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Quest Software Bid May Signal M&A Appetite (Update 1)

Updated to reflect added detaill about strategic bidder, closing stock prices

NEW YORK ( TheStreet) - After agreeing to a $2 billion private equity buyout offer in March, Quest Software (QSFT) is surging after it revealed that it's received a higher $25.50 a share offer from an unnamed "strategic" bidder.

In March, Quest Software, a maker of enterprise software products, accepted a $23 a share bid by private equity firm Insight Venture Partners, which valued the Aliso Viejo, Calif.-based company at $2 billion. However, on Thursday, Quest said that it received a higher offer during a 60-day "go shop" period to find shareholders a higher takeover bid.

The announcement could signal a bidding war for the software company after previous media reports and analyst comments that companies as large as Dell (DELL) may be interested in acquiring the company.

On Thursday, Quest Software said that it has received a proposal from a "strategic bidder" to buy the company at a near 11% premium, in an offer it said was "not subject to any financing." The disclosure of the bid comes on the expiration of Quest's "go shop" period and now puts Insight Ventures in a position to match or boost the $25.50 bid, or walk away from its March takeover offer in coming days.

"The Company's Board of Directors has not changed its recommendation with respect to the pending transaction with Insight," said Quest Software in a Thursday press release. "Under the Insight Merger Agreement, Insight has certain matching rights, including the right to propose modifications to the terms of the Insight Merger Agreement and related agreements prior to the expiration of a minimum three-business-day period."

After the market close, Reuters reported that Dell is the strategic bidder mentioned in Quest Software's press release.

Morgan Stanley (MS - Get Report) advised Quest Software during its "go shop" period, which has extended a highly watched private equity buyout drama. With the new bid, Quest Software's takeover premium now stands at over 35% to its shares prior to Insight's March 8 bid, which came at a 19% premium.

Previous to Thursday's disclosure, Bloomberg reported that Dell was discussing a bid for Quest Software; however, subsequent reports refuted the notion of its involvement in the bidding process.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DELL $0.00 0.00%
BMC $0.00 0.00%
CRM $77.25 1.91%
MS $27.26 0.74%
AAPL $93.64 -0.11%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs