WISCONSIN RAPIDS, Wis. (AP) — The co-founders of learning software company Renaissance Learning Inc. won't support a revised buyout offer from Plato Learning Inc., so the company is sticking with an accepted, although lower offer from Permira Funds.
Last month Plato made an unsolicited offer of $15.50 per share in cash for Renaissance Learning. The bid was valued at about $454 million, based on Renaissance Learning's more than 29 million outstanding shares as of June 30.
But Renaissance Learning has already agreed to sell itself to private equity firm Permira Funds. On Tuesday the companies amended the agreement, raising the total value of the deal to approximately $455 million. This would include $15 per share in cash paid to Renaissance Learning co-founders Terrance and Judith Paul — as well as affiliates and family members. Permira offered $16.60 per share in cash for the remainder of the outstanding shares.
The revised Plato offer gives the Pauls $15.10 per share in cash for the shares they own. Plato offered $18 per share in cash for the remaining outstanding stock.
The company said the total value of the deal under the revised proposal would be about $471 million. Plato said the deal would be financed with $144 million in equity from Thoma Bravo LLC and HarbourVest Partners LLC and $410 million in debt. Plato still needs signed commitment letters and guarantees. The company said the new bid is not subject to a financing condition.
Renaissance Learning said Wednesday that the Pauls have told its board that they will not support a buyout by Plato. The company said that based on that information, as well as a consultation with its financial advisor, the board has unanimously decided that Plato's new offer "could not reasonably be expected to lead to a superior proposal" than that of Permira Funds.
The company still recommends that shareholders approve the Permira Funds offer at a special shareholders meeting scheduled for Oct. 17. The Pauls, along with their affiliates and family members, plan to vote their shares — which make up about 69 percent of the company's outstanding stock — in support of the Permira Funds deal.
Shares of Renaissance Learning, based in Wisconsin Rapids, Wis., added 10 cents to $16.86 in morning trading.
