Quest Accepts Bid from Insight Venture Partners, Vector Capital

Software designer and developer Quest Software

announced Tuesday that it has accepted a $25.75 per share bid from Insight Venture Partners. This new bid topped a $25.50 bid from Dell

. As a part of the Insight bid, Quest Software agreed to the addition of Vector Capital to the buyout group. In addition, the deal's termination fee was raised drastically to $25 million from $6.3 million. In a statement, Quest said that, "In making its recommendation, the Special Committee consulted with its independent financial advisors and outside legal counsel. In connection with the Board's approval of the Amended Agreement with Insight and Vector for a purchase price of $25.75 per share, and upon the recommendation of the Special Committee, the Board also determined that the previously announced proposal for $25.50 per share submitted by a strategic bidder no longer constituted a “Superior Proposal” as defined in the Insight Merger Agreement." The deal will likely end months of haggling between Quest and Insight. Quest originally said that it had agreed to be acquired by Insight for $23 per share in March. However, just two months later it said that it had received proposals from elsewhere that it believed would lead to a better offer. That proved to be the case, with an offer from Dell forthcoming. CEO Vincent Smith has presumably preferred a sale to Insight, though, as it would allow him to continue running the company. The saga may not be over, though, as Dell might still return with a bigger offer. But with Dell announcing its first dividend on June 12, the company may find that it is limited in how much it can offer. Quest's stock rose more than 40% year to date. Wednesday, the company had a market value of close to $2.2 billion. Quest Software traded down roughly 0.4% for the day. Dell traded up roughly 0.7% in the session.