Quest Says Third Party Boosts Buyout Offer to $2.32 Billion

06/25/2012| 09:23am US/Eastern

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   By Victoria Stilwell 
 

Quest Software Inc. (>> Quest Software, Inc.) said the undisclosed third party bidding to take over the business-software maker has boosted its offer to $2.32 billion, a bid it determined to be superior to the raised $2.17 billion buyout deal from Insight Venture Partners.

The bidder hasn't been named but is thought to be computer maker Dell Inc. (>> Dell Inc.).

Quest shares climbed 5.6% to $27.68 in premarket trading, topping the new offer of $27.50 a share. The bid marks an increase of $2 a share over the original third-party bid. Insight, meanwhile, originally offered $23 a share in March and later boosted that bid to $25.75, adding fellow private-equity firm Vector Capital to its effort.

Insight will have the opportunity to match or beat the increased offer. Quest said if the new offer remains superior, it would terminate its existing merger agreement with Insight.

Quest, of Aliso Viejo, Calif., has faced mounting competition in its traditional specialty--software for managing databases--as vendors such as Oracle Corp. (ORCL) have introduced their own management tools. Quest Software has responded by trying to diversify its business by acquiring smaller rivals.

The fight over Quest echoes a similar battle Dell waged for high-end data-storage maker 3Par Inc. in 2010. Dell eventually bowed out after Hewlett-Packard Co. (>> Hewlett-Packard Company) bid $1.6 billion for the company, which makes rapidly accessible storage drives that allow corporations to run more efficient databases.

Write to Victoria Stilwell at Victoria.Stilwell@dowjones.com

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