While not a done deal, Barracuda Networks’ new bid of $8.25 for each share of Sourcefire seems to be closer to the level the market was valuing the Snort shop. Nearly a month ago, the aptly named Barracuda swarmed Sourcefire with an unsolicited bid of $7.50 per share, which worked out to an equity value of $186m for the company. At the time, we called it a ‘floor bid’ – one that the privately held company would likely have to raise. The new offer adds $19m to Sourcefire’s price tag.
That bump appears to be enough for Sourcefire shareholders. (However, the company itself is still holding out for more.) After spending all of the time trading above Barracuda’s initial offer price, Sourcefire shares on Wednesday afternoon were trading in line with the newly raised bid of $8.25. The stock gained 46 cents, or 6%, to $8.11 in mid-afternoon trading.
Since the market has signed off on this deal, we thought we’d note a final curiosity about the proposed transaction: Sourcefire didn’t hire a banker. A company representative said last week that it ‘periodically consults’ with financial advisers but didn’t have any specific bank retained. (We contacted the company again on Wednesday for an update, but we didn’t hear back.)
Sourcefire is actually the second company targeted in an unsolicited offer that is going it alone. Mentor Graphics also told us it didn’t have a banker to help it fight off the ‘bear hug’ from Cadence Design Systems last week. And it wasn’t like the bid was just sprung on Mentor. The two companies had been talking since April, with Cadence advised by Deutsche Bank Securities. However, a representative said it was planning to hire one. (If history is any guide, Mentor will likely be calling Goldman Sachs, given that bank’s legacy of work for companies on the defensive.) Just add the lack of mandates to the growing list of problems for bankers, at least for those who haven’t already been laid off in the recent downturn.