The recent agreement for Quest Software, Inc. to be taken back to the private sector has raised some eyebrows. Insight Venture Partners, a private equity firm, has made an offer to take the company off the public market and turn into a privately-owned company. An investigation has been launched into the legitimacy of the sale that would buy stock from shareholders at $23 per share.
The transaction that would take the company private was agreed on at $2 billion, and the investigators are going to try to determine if this was enough to be considered a sale that is in the best interest of the company’s private investors. The share price caught attention of investigators who know the company’s stock had traded at over $26 within the last ten months, and they say the company should buy the shares at a price that could go as high as $29.
Quest Software’s current CEO Vincent C. Smith and some of the high ranking managers will continue to run the company after the transition has been made. The investigation will seek to determine if the company’s board of directors is in breach of fiduciary duty to its shareholders by making an agreement to repurchase the stock at the agreed price.
Shareholders of this company, and any other shareholders concerned that their best interests might be overlooked, should contact an experienced New York business litigation attorney to discuss their situation and their options. The Law Offices of Jonathan M. Cooper offer a free consultation to answer any questions you may have about the fiduciary duty that companies have to their shareholders.