Who is Quest’s Mystery Bidder?

Quest Software has received a superior offer from an unnamed bidder.

Lest anyone forgets, Quest already has a $2 billion deal in place with Insight Venture Partners, the New York PE firm.

Quest, today, says it received a $25.50 per share, or $2.15 billion offer from a strategic bidder. They didn’t disclose who it was. We’re hearing that the offer is coming from Dell, according to two private equity sources. Last month, Reuters reported that Dell was planning to offer between $23 and $26 a share to buy Quest but that talks fell through. It now looks like those discussions are back on, sources say.

“The bid is from Dell,” one PE exec says. “I have no idea who will win. But it will be a fight and whether it’s a bidding war or a lawsuit that remains to be seen.”

Aliso Viejo, Calif.-based Quest helps companies manage databases and provides other corporate IT services. News of the offer caused Quest shares to jump more than 9% to $26.06 in afternoon trading Thursday.

In March, Quest agreed to sell itself to Insight for $23 a share. The deal included a go-shop that ended in May. At that time, Quest said it received “multiple proposals” but that it hadn’t decided whether any of them “constituted a superior proposal,” according to a statement at that time.

Quest said it told Insight about the offer today and that the bid is “superior.” Insight has three days to match the offer. If Quest does go with another buyer, the company has agreed to pay Insight a break-up fee of either $4.2 million or $6.3 million, Reuters says.

Officials for Dell and Insight couldn’t be reached for comment.


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