Quest Software, Inc. (NASDAQ:QSFT) Investor Investigation Over Potential Breaches of Fidcuary Dutiers in Buyout
July 3, 2012 (Update) -- On July 2, 2012, Quest Software announced that it had entered into a definitive merger agreement to be acquired by Dell. According to the terms of the deal, Dell will acquire all outstanding shares of the company through an all-cash transaction. Pursuant to the agreement, Quest Software shareholders will receive $28.00 in cash for each share of the company they own. The transaction is expected to close during Dell's third fiscal quarter.
San Diego, March 09, 2012 (Shareholders Foundation) -- The announcement by Quest Software, Inc. that it agreed to be acquired for $23 per NASDAQ:QSFT caused an investigation for investors in Quest Software, Inc. (NASDAQ:QSFT) shares concerning whether the offer to acquire Quest Software, Inc. and the buyout process are unfair to investors in NASDAQ:QSFT shares.
The investigations by law firms concern whether Quest Software, certain officers and directors, and/or others breached their fiduciary duties owed to Quest Software, Inc. (NASDAQ:QSFT) investors in connection with the proposed acquisition.
On, Friday, March 9, 2012 – Quest Software, Inc. (NASDAQ: QSFT) announced that it had entered into agreements with affiliates of Insight Venture Partners, under which stockholders not affiliated with the buyout group would receive $23.00 per share in cash, valuing the Company at approximately $2.0 billion.
Quest Software, Inc said the offer represents a 19-percent premium to the closing price on March 8, 2012.
Quest Software’s Chairman and CEO Vinny Smith, who approximately 34 percent of current shares outstanding, already agreed to roll over all of his existing shares and restricted stock units in Quest Software, Inc. (NASDAQ: QSFT).
However, following the buyout announcement shares of Quest Software, Inc. (NASDAQ:QSFT) jumped from $19.40 per share on Thursday to $24.13 per share on Friday. Additionally, at least one analyst has set the high target price for NASDAQ:QSFT shares at $29 per share.,Both prices are well above well above the current offer. Fruthermore, NASDAQ:QSFT shares traded as early as July 2011 at $23.20,in April as high as $25.76 per share, and in December 2010 as high as $28.10 per share, leaving certain investors with no premium but rather asking them to hand their shares over at a discount.
Therefore the investigation for NASDAQ:QSFT investors concerns whether the Quest Software Board of Directors undertook an adequate sales process and in particular breached their fiduciary duties to Quest Software, Inc. (NASDAQ:QSFT) shareholders by failing to adequately shop the Company before entering into this transaction.