Bidding war hots up for Quest

Unnamed bidder thought to be Dell leaps back into race with $2.32bn offer

Dell appears to have leapt back into the bidding war for Quest Software after the software outfit confirmed it has received an improved $2.32bn (£1.48bn) offer from a mystery bidder.

Quest last week accepted a sweetened offer of $25.75 a share from a buyout group led by private equity house Insight Venture Management.

However, the NASDAQ-listed vendor announced yesterday that it has received a higher, $27.50-a-share offer from an unnamed bidder, thought to be Dell.

Dell looked a distant second favourite after Insight last week upped its offer, brought Vector Capital into its buyout group and managed to increase the termination fee associated with its bid to $25m.

But Quest's board confirmed it now considers yesterday's bid to be the superior offer. Insight and its partners have three days to come back with a better offer.

Dell has made a string of acquisitions this year but would still sorely want to get its man, having tasted defeat against HP in ithe bidding battle for storage vendor 3PAR in 2010.

Quest's share price spiked significantly yesterday, indicating that investors think yesterday's bid may not be the last word.