The Negotiation of Dell Acquiring Quest is Said to Have Broken down

According to a source being familiar with the matter, the negotiation on Dell acquiring the enterprise system management software manufacturer Quest Software (hereinafter referred to as ?Quest?) has broken down, but lower-level representatives of the two companies are still in contact.

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Dell?s previous transaction of acquiring Quest with the price of $ 23 to $ 26 per share failed in the last month. Dell has been seeking to diversify their own business and to expand its business scope beyond the PC. According to sources, the negotiation about the all-cash acquisition offer between the two companies has broken down, but they did not specify the reasons for the breakdown of the negotiation.

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Previously, there were news sources saying Dell is negotiating with Quest on the acquisition of the latter and the negotiation has entered the advanced stage, but the negotiation between the parties still has the possibility of rupture.

The market capitalization of Quest is about $ 2.1 billion.

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Quest, in March this year, agreed on a takeover offer of a private equity firm Insight Venture Partners, which is worth of about $ 2 billion. But it said it is still receiving other offers. Any offer wanting to be accepted by the Quest must then pass a judgment of the company?s special committee, thinking that the bid offer is superior to the offer of Insight Venture Partners.

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The software developed by Quest can help companies manage databases and servers, and backup information and recover lost data. Dell is using the M & A transactions to help itself to meet the needs of enterprise customers and reduce its dependence on the PC business. In addition, Quest's software also allows customers to monitor the performance of business operation applications. Analysts believed that Quest?s backup and security software products will be complement of Dell?s portfolio of products. Besides Dell, analysts said the BMC Software Inc., CA Inc., Microsoft and Oracle are also possible bidders.

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Dell and Quest both declined to comment on this news, and Insight Venture Partners has not yet made any comment. If the Quest terminates the merger agreement with Insight Venture Partners, the Quest will need to pay $ 4.2 million or $ 6.3 million breakup fees to the latter, and the concrete amount would depend on the trading time.

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