Privatisation of Quest may attract higher bids

Quest Software rose above the $23-a-share offer from Insight Venture Partners to take the technology company private, signalling investors may anticipate higher bids.

Quest, based in Aliso Viejo, California, advanced 22% to $23.62 in early trading yesterday. The $2bn (€11.5bn) offer, announced in a statement yesterday is 19% higher than Quest’s closing price on Thursday.

The company, which on Feb 14 appointed executive chairman Vinny Smith as chief executive, has reinvented its business model in recent years by acquiring small applications, such as software companies and could attract higher offers, said Brian Freed, an analyst at Wunderlich Securities in Denver.

“There’s a good probability that you would see another offer come that could result in another deal or a kiss from Insight that ends it,” Mr Freed said in a telephone interview. “Right now, it’s a pretty attractive purchase price for Insight.”

The purchase price is “pretty conservative,” Mr Freed said.

The company said it would solicit other bids for 60 days. Mr Smith will stay on as chief executive, the firm said. He succeeded Doug Garn, who had been chief executive since Oct 2008 and who stepped down citing poor health.

Quest Software, headquartered in California, simplifies and reduces the cost for companies to manage their computer and IT systems through cloud computing.

The company has a growing presence in Ireland and has its main operation in Cork where it has its international shared services centre. The company initially announced the creation of 150 jobs but already 180 people work at its base in the City Gate Park development in Mahon and soon Quest will have sufficient accommodation for at least 500 workers in Mahon.

— Bloomberg