Dell and Quest acquisition talks break down

Dell’s plans to buy Quest Software appear to have fallen flat on their face.

According to Reuters, while lower-level minions are still trying to hatch a deal, the bigger fish are not talking to each other.

A previous deal for Dell to buy Quest at a range $23 to $26 per share fell through last month.

Dell had been going for an all-cash offer for the software outfit. It had been wanting to get away from hardware and offer more software/hardware packages.

The talks had not been going well and it is not clear which side walked away first.

Quest share holders were not happy at the news and its shares fell 5.04 percent on the back of the announcement.

Quest had already agreed in March to be bought by Insight Venture Partners for $2 billion, or $23 a share, and taken private.

But it called for new bids after several other companies put in offers, including Dell.

Quest and Dell would have been a good match. The company makes software to monitor the flow of data through networks. They have worked together since 2004 and Quest is one of Dell’s top 10 partners. Dell is one of Quest’s top five partners.

If Dell got its claws into Quest, it might have helped the company become a bigger player in database management, data protection and Windows Server management.

Part of the problem is that a third of the company is owned by Chairman and Chief Executive Vinny Smith, who took over in February after Doug Garn stepped down, citing poor health.

A lawsuit was started by shareholders after the deal with Insight Venture was announced in March, arguing the deal undervalued Quest.

One of the suits claims that Quest’s CEO rushed to sell the company to head off a possible regulatory probe into accounting practices.

That sort of mess is probably something that Dell could do without.