Dell-Quest deal possible over weekend: sources

NEW YORK/SAN FRANCISCO (Reuters) – Dell Inc is expected to reach an agreement to buy network security software maker Quest Software Inc as soon as this weekend after a previous deal fell apart, several people familiar with the matter said.

Dell is planning to offer between $23 and $26 per share to buy the enterprise systems management software maker, two sources told Reuters on condition of anonymity because the discussions were not public.

The previous deal fell apart after investors sent Dell’s shares down 17 percent on Wednesday when the company reported a disappointing revenue forecast.

Quest, based in Aliso Viejo, California, had struck a separate acquisition agreement with Insight Venture Partners in March at a price of $2 billion, or $23 per share.

On May 9, Quest announced that it had received multiple alternative proposals during its go-shop period. “The alternative proposals are reasonably expected to lead to a superior proposal,” the company said in a statement.

Dell, which has acquired five companies so far this year including Wyse Technology and SonicWall, is also weighing other acquisition targets, such as BMC Software Inc, one person said.

Dell and Quest Software declined to comment. BMC Software was not immediately available for comment.

It is unclear why the earlier offer fell apart between Dell and Quest, but announcing a large deal following Dell’s 17 percent share plunge Wednesday after disappointing quarterly earnings and revenue forecast would have irked investors, the person said.

The No. 3 PC maker has been active in the MA space, snapping up companies as it tries to diversify away from PCs and become a one-stop shop for IT needs of corporations.

Dell ended the fiscal first quarter with $ 17.2 billion in cash and investments.

(Reporting By Nadia Damouni in New York and Poornima Gupta in San Francisco; Editing by Leslie Gevirtz)

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