Dell looks a distant second favourite to land acquisition interest Quest Software after the software outfit accepted a sweetened $2.17bn (£1.38bn) bid from private equity house Insight Venture Partners.
Insight has upped its bid to $25.75 a share, trumping the $25.50-a-share bid lodged last week by a "strategic bidder", widely thought to be Dell.
Fellow private equity house Vector Capital is also now part of Insight's bid, which has been approved by Quest's board, with the exception of chief executive Vinny Smith who recused himself from the vote.
Quest first accepted a $23-a-share offer from Insight in March but then backtracked after receiving interest from other parties in May. However, Smith, who owns a 34 per cent stake in Quest, is known to have favoured a deal with Insight as it would allow him to continue helming the firm.
The termination fee associated with Insight's offer has also been hoisted from $6.3m to $25m, making it more difficult for Quest to back out of a deal.
Dell's recent acquisition drive has taken in a host of software firms, storage outfits such as EqualLogic and Compellent, security players such as SonicWall and SecureWorks and networking companies such as Force10.
Michael Dell has made no secret of his plans to continue to branch out further from Dell's hardware roots through acquisition and Quest – which itself has made a string of acquisitions over the past few years including Provision Networks, Vizioncore, ScriptLogic and ChangeBASE Provision – would have represented one of its larger deals.
Last year, NASDAQ-listed Quest posted net profits of $44m on revenue that rose 11.8 per cent to $857.4m.
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