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Quest Software plans Dutch auction tender offer for up to $400 million of stock
By Angela McDaniels
Tacoma, Wash., Oct. 8 - Quest Software, Inc. said its board of directors authorized a modified Dutch auction tender offer to repurchase $135 million to $400 million of the company's common stock.
The per-share price is expected to be at least $13.25 and no more than $15.50, according to a company news release. Based on the midpoint of the price range, this would represent 9% to 26% of the company's common stock.
Quest said that in light of recent volatility in its stock and because the size of the prospective tender offer is to be determined, the board will decide the actual price range when the tender offer begins later in October.
The company will seek up to $300 million of debt financing to fund a portion of the repurchase. Quest said that if it is unable to secure the financing, the repurchase would be funded from cash on hand and would likely be nearer to $135 million.
Quest executive chairman Vinny Smith plans to tender 3 million shares in the offer, according to the release.
"With the assistance of the company's executive management and outside advisers, Quest's board of directors has evaluated the company's operations, strategy and expectations and has determined that repurchasing a portion of Quest's shares of common stock is a prudent use of the company's financial resources," the company said in the release.
"Quest believes that its current stock price levels do not reflect the current performance or long-term growth prospects of its business. Accordingly, Quest believes that an investment in its own stock at the range of offered prices represents an attractive strategic transaction."
Quest Software is an enterprise systems management vendor based in Aliso Viejo, Calif.
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