New York — Quest Software Inc (QSFT.O) Thursday said a strategic bidder proposed to buy the company for about $2.15 billion in cash, outbidding an earlier offer of nearly $2 billion by a private investment firm.

The current offer of $25.50 per share is at a premium of 7 percent to Quest’s Wednesday closing price of $23.86 on the Nasdaq.

Quest shares were up 8.5 percent in premarket trading on Thursday, signaling that investors are expecting a better offer for the enterprise systems management software maker.

Reuters had reported that Dell Inc (DELL.O) was planning to offer between $23 and $26 per share to buy the software maker, but talks fell through earlier this month.

In March, private investment firm Insight Venture Partners offered to buy the company for $23 per share.

Quest had said it received multiple offers after the Insight deal was announced, but Insight Venture will have the right to match rival offers.
If another buyer ends up with Quest, it agreed to pay Insight a break-up fee of either $4.2 million or $6.3 million, depending on the timing of the deal.

Quest on Thursday said the new offer from the unidentified bidder is superior.

“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,” Quest said in a statement.

Quest, whose products include software that monitors the flow of data through networks, is led by Chief Executive Vinny Smith, who took over in February after Doug Garn stepped down citing poor health. — Reuters