Shares of Quest Software Inc. rose in early trading today after the Aliso Viejo-based company announced it had received a $2.15 billion bid from a strategic buyer, topping previous offers.
Investors sent Quest shares up nearly 9% to a market value of about $2.2 billion.
Quest is one of Orange County’s biggest software makers with $857 million in sales in 2011. It has 3,000 workers overall, about 600 here.
The takeover offer from an undisclosed bidder topped a proposed $2 billion deal led by New York private equity firm Insight Venture Partners.
Insight has the right to match the offer within three business days.
Quest will enter into a “binding written definitive agreement in connection with the superior proposal” if it doesn’t receive a higher bid from Insight, the company said.
CNBC reported today that Insight is working to increase its proposal, setting up a potential bidding war.
The Business Journal, citing analysts and company watchers, has linked Round Rock, Texas-based Dell with Quest since the business-software maker announced in early March it was slated to go private. Recent reports indicated that Dell and Quest have backed away from talks on a deal.
Quest makes software that manages and improves on other business products from Redmond, Wash.-based Microsoft Corp., IBM Corp. of New York and Redwood Shores-based Oracle Corp., other potential suitors linked to the company.
The latest proposal values outstanding shares of Quest common stock at $25.50 per share, compared to Insight’s bid of $23 per share.
The bid is not subject to any financing contingencies, Quest said in a regulatory filing.
The new bidder would pay a break-up fee of $75.2 million if a deal is terminated under “certain circumstances” or $43 million if the acquisition is not approved by shareholders.
The deal with Insight Ventures included a relatively small break-up fee of $4.2 million during a 60-day "go-shop" period or $6.3 million at a later date.