Vector Capital’s unsolicited proposal to purchase Aladdin Knowledge Systems for $13 (€8.8) per share in cash has been rejected. The offer “significantly undervalues the company and its prospects for the future”, Aladdin said in a statement.
Information security company Aladdin added that Vector’s offer does not recognise the intrinsic value of the company and its strategic initiatives.
Aladdin also rejected an offer from Vector to purchase the company’s digital rights management business for between $125 million and $135 million. Aladdin had invited Vector to bid on this part of its business, according to an Associated Press report.
Vector Capital declined to comment.
Aladdin acknowledged the receipt of Vector’s proposal on 20 August.
The company’s board and advisors reviewed the offers in the context of Aladdin’s recent financial performance, current business plan and additional alternatives, according to the firm. Aladdin determined that “through the execution of its strategy, Aladdin will create substantially greater value for its shareholders than either of Vector Capital’s proposals”.
Technology-focused private equity firm Vector spun out of Ziff Brothers Investments, a family investment firm, in 1997. In August 2007, Vector closed its fourth fund on $1.2 billion, more than three times the size of its previous fund.
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