A new bid for Aliso Viejo-based Quest Software Inc. tops the $2.17 billion offer the company accepted last week.
The latest offer amounts to about $2.3 billion and comes from an unidentified bidder believed by many observers to be Roundrock, Texas-based Dell Inc.
Quests shares were up about 6% in early trading today, to a market value of about $2.3 billion.
The prior offer was led by New York-based Insight Venture Partners and Vector Capital in San Francisco. It was approved by a special committee formed by Quest’s board to review alternative bids.
The Insight-Vector bid was subject to standard shareholder and regulatory approvals, and called for the private equity firms to get a $25 million break-up fee, up from $6.3 million, if Quest’s board approves a superior bid. They would also get a $12 million expense reimbursement fee, up from $7 million.
Insight saw its initial bid of $2 billion topped by an offer from an unidentified bidder in what was believed to be Dell’s first attempt at a deal for Quest.
The latest Insight-Vector offer would be financed with $364 million in cash, with Insight and Vector each accounting for half the total, a rollover of at least 84% of Quest Chief Executive and Chairman Vinny Smith’s existing shares, and approximately $1.2 billion in debt financing from J.P. Morgan Chase Bank N.A., RBC Capital Markets and Barclays Capital.
A bid by Dell would likely include the purchase of Smith’s stake.
Quest makes software that manages and improves on other business products from Redmond, Wash.-based Microsoft, IBM Corp. in New York and Redwood Shores-based Oracle Corp.
The company is one of Orange County’s biggest software makers with $857 million in 2011 sales. It has 3,000 workers overall, about 600 here.
