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Quest Software Receives Strategic Bid

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Quest Software (NASDAQ: QSFT), designer and developer of software products, announced Monday that it has received a strategic bid of $2.32 billion. The new bid beat a previous offer by private investment firm Insight Venture Partners of $2.17 billion.

A strategic buyer, or a synergistic buyer, is often a competing company wanting to create synergy with existing segments. For this reason, the buyer may remain anonymous.

If the new bid were to go through, it would see the strategic bidder acquire Quest for about $27.50 per share, in cash.

The deal approached completion when Quest Software's Board of Directors said that the new strategic proposal constitutes a “superior proposal”. The term “superior proposal” was defined in The Agreement and Plan of Merger, dated March 8 2012, and signed by Quest and affiliates of Insight Venture Management.

The new bid is the latest in a game of back-and-forth between Quest, Insight Venture Partners and the strategic bidder. Last week, Insight upped its bid to $25.75 per share. This offer beat the $25.50 per share strategic bid.

On June 14, Reuters reported that a strategic bid for Quest of $25.50 was made by Dell (NASDAQ: DELL). Likewise, earlier Monday, Reuters stated that the new bid was also made by Dell.

Insight has the right to reply with a new bid of its own within three days. This saga could go on for a while, with both Insight and the strategic bidder increasing their bids until one side eventually gives up.

On Monday afternoon, Quest Software was trading at around $27.59, up roughly 5.2%. Dell was trading near 11.98, down close to 1.9%.

Follow me @BCallwood.

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