Shares of Santa Ana’s MSC.Software Corp., a maker of simulation software for the aerospace and defense industries, rose Wednesday after the company said it is taking a higher buyout offer by an unnamed private equity firm.
Investors sent shares up more than 6% Wednesday on a recent market value of $360 million.
The company said its directors received an offer from a private equity firm to acquire MSC for around $354 million.
The board determined that the new offer is a “superior proposal” to the one made July 7 by Palo Alto-based private equity firm Symphony Technology Group LLC.
Symphony offered about $338 million in cash to buy the company in a deal that was expected to close by the end of the quarter.
Activist investor Elliott Management Corp., a unit of New York hedge fund Elliott Associates LP, played a role in the original deal.
Elliott, which is set to provide some debt and private equity financing to help fund the deal, has a roughly 13% stake in MSC and is its biggest shareholder.
It had been agitating for change at MSC for the better part of a year.
MSC said it’s set to end its deal with Symphony and agree to be bought by the other private equity firm.
The move sets the stage for a potential bidding war between the two private equity players.
Under the terms of the new agreement, Symphony can make a counter-offer by Tuesday.
The buyout will mark the end of a decade of tough times for MSC, which makes simulation software used for testing parts of airplanes and autos before expensive prototypes are constructed.
Too many distractions brought on by several government probes, acquisitions that didn’t pay off and failed turnaround attempts spelled the end for an independent MSC, which once ranked among Orange County’s biggest software makers.
Two shareholder lawsuits have been made public since the initial buyout offer was announced. Both are class-action suits that argue Symphony’s price was too low.
