SumTotal Board OKs Latest Vista Bid
Vista’s break-up fee is now equivalent to the size of the one that would have been awarded to Accel-KKR.
May 21, 2009
Vista Equity Partners increased its pressure on SumTotal’s board to agree to its buyout terms as the bidding war between the private equity firm and Accel-KKR has become increasingly tense for the listed California software firm.
Vista, also SumTotal’s largest shareholder, said that as bids from it and Accel-KKR continue to grow, the target increasingly “keep[s] tilting the playing field against” Vista. At the heart of the dispute, and, legal sources say, potentially at the crux of future litigation, is SumTotal’s agreement earlier this week to more than double, to about $6.7 million, its break-up fee to Accel-KKR.
This is increasingly likely to come into play as Vista now has the highest bid for SumTotal, although the target’s go-shop period is yet to conclude.
In a statement issued by SumTotal, in which the target stated its directors have declared Vista’s bid superior, the software firm stated that it “would be required to pay a fee of $6.67 million to Vista Equity in order to accept a superior proposal from any other party.” This is equivalent to the break-up fee that would have been paid to Accel-KKR.
Part of Vista’s $4.85 bid includes a provision that would increase its per-share offer to $4.95, provided the target can have its agreement to the increased break-up fee with Accel-KKR reduced.
RBC Capital Markets is acting as financial advisor to the board of SumTotal, and Wilson Sonsini Goodrich & Rosati is acting as SumTotal’s legal advisor. Kirkland & Ellis is acting as legal advisor to Accel-KKR.
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