Quest Software (QSFT) Gets Superior $27.50/Share from Strategic Bidder
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Quest Software, Inc. (Nasdaq: QSFT) announced the receipt of a proposal from a strategic bidder to acquire all of the outstanding shares of Quest common stock for $27.50 per share in cash.
The Company’s Board of Directors, acting through the special committee of independent directors established by the Company’s Board of Directors (the “Special Committee”), determined that the proposal constitutes a Superior Proposal, as such term is defined in the Agreement and Plan of Merger dated March 8, 2012, as amended on June 19, 2012 (the “Existing Merger Agreement”), among Quest and affiliates of Insight Venture Management, LLC and Vector Capital (together, the “Buyout Group”). In making its determination, the Special Committee consulted with its independent financial advisors and outside legal counsel.
The definitive terms and conditions of a merger agreement detailing the proposal have been fully negotiated, and the agreement is subject only to execution by the Company. The proposal is not subject to any financing contingencies. In addition, in the event that the stockholders who have agreed to roll over their shares in connection with the pending transaction with the Buyout Group (the “Rollover Stockholders”) do not support the Superior Proposal, the Company has agreed to (i) grant to the bidder an option to acquire newly issued shares equal to 19.9% of the Company’s issued and outstanding shares as of the date of the agreement and (ii) pay to the bidder a break-up fee of 3.5% of the transaction value if the proposed merger agreement is terminated under certain circumstances, or a break-up fee of approximately 2.9% of the transaction value if the proposed merger agreement is terminated because the Superior Proposal is not approved by the vote of the Company’s stockholders. Alternatively, in the event that the Rollover Stockholders agree to support the Superior Proposal, the Company has agreed to (i) pay the bidder a break-up fee of 2.5% of the transaction value or reimburse the bidder’s out-of-pocket expenses up to $5 million if the proposed merger agreement is terminated because the Superior Proposal is not approved by a vote of the Company’s stockholders, and (ii) remove the option described above.
Quest is a party to the Existing Merger Agreement among Quest and the Buyout Group, pursuant to which the Buyout Group has agreed to acquire all of the unaffiliated outstanding shares of Quest for $25.75 per share in cash. In accordance with the Existing Merger Agreement, Quest provided notice to the Buyout Group on Monday, June 25, 2012 of the Board’s determination that the proposal from the strategic bidder constitutes a Superior Proposal.
The Company’s Board of Directors has not changed its recommendation with respect to the pending transaction with the Buyout Group. Under the Existing Merger Agreement, the Buyout Group has certain matching rights, including the right to propose modifications to the terms of the Existing Merger Agreement and related agreements prior to the expiration of a minimum three-business-day period. If the proposal continues to constitute a Superior Proposal after the expiration of such period, the Company expects to terminate the Existing Merger Agreement and related agreements and to enter into a binding written definitive agreement in connection with the Superior Proposal.
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The Company’s Board of Directors, acting through the special committee of independent directors established by the Company’s Board of Directors (the “Special Committee”), determined that the proposal constitutes a Superior Proposal, as such term is defined in the Agreement and Plan of Merger dated March 8, 2012, as amended on June 19, 2012 (the “Existing Merger Agreement”), among Quest and affiliates of Insight Venture Management, LLC and Vector Capital (together, the “Buyout Group”). In making its determination, the Special Committee consulted with its independent financial advisors and outside legal counsel.
The definitive terms and conditions of a merger agreement detailing the proposal have been fully negotiated, and the agreement is subject only to execution by the Company. The proposal is not subject to any financing contingencies. In addition, in the event that the stockholders who have agreed to roll over their shares in connection with the pending transaction with the Buyout Group (the “Rollover Stockholders”) do not support the Superior Proposal, the Company has agreed to (i) grant to the bidder an option to acquire newly issued shares equal to 19.9% of the Company’s issued and outstanding shares as of the date of the agreement and (ii) pay to the bidder a break-up fee of 3.5% of the transaction value if the proposed merger agreement is terminated under certain circumstances, or a break-up fee of approximately 2.9% of the transaction value if the proposed merger agreement is terminated because the Superior Proposal is not approved by the vote of the Company’s stockholders. Alternatively, in the event that the Rollover Stockholders agree to support the Superior Proposal, the Company has agreed to (i) pay the bidder a break-up fee of 2.5% of the transaction value or reimburse the bidder’s out-of-pocket expenses up to $5 million if the proposed merger agreement is terminated because the Superior Proposal is not approved by a vote of the Company’s stockholders, and (ii) remove the option described above.
Quest is a party to the Existing Merger Agreement among Quest and the Buyout Group, pursuant to which the Buyout Group has agreed to acquire all of the unaffiliated outstanding shares of Quest for $25.75 per share in cash. In accordance with the Existing Merger Agreement, Quest provided notice to the Buyout Group on Monday, June 25, 2012 of the Board’s determination that the proposal from the strategic bidder constitutes a Superior Proposal.
The Company’s Board of Directors has not changed its recommendation with respect to the pending transaction with the Buyout Group. Under the Existing Merger Agreement, the Buyout Group has certain matching rights, including the right to propose modifications to the terms of the Existing Merger Agreement and related agreements prior to the expiration of a minimum three-business-day period. If the proposal continues to constitute a Superior Proposal after the expiration of such period, the Company expects to terminate the Existing Merger Agreement and related agreements and to enter into a binding written definitive agreement in connection with the Superior Proposal.
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