Deltek shares stubbornly remain elevated

The $890 million buyout of Deltek Inc. by private equity firm Thoma Bravo LLC has reached the end of its nonsolicitation window but still trades over the deal offer.

The chance of a spoiler bid for the project management software company that Thoma Bravo is taking private for $13 per share, or $1.1 billion including assumed debt, has been slim since the deal was announced Aug. 27. New Mountain Capital LLC owns 59.5% of Deltek and is committed to the transaction, which was approved by written consent, as allowed under Delaware law, on Sept. 7.

Deltek shares have traded over their deal value in modest volume since early September. The merger agreement does not provide for a go-shop, but Deltek was allowed to respond to unsolicited approaches received by Sept. 15 and work to negotiate a superior deal by Sept. 25.

Nothing has surfaced according to a person close to the situation.

Deltek traded in considerable volume Tuesday, Sept. 25, for about $13.10, still at a premium to the buyout price.

Some of the trading in the shares can be attributed to short covering, but the short interest in Deltek declined considerably by early September. Shorting sales since then would have been sentiment against another buyer entering the fray, which leaves open the question of who has been buying.

The merger agreement is not conditioned on a stated level of dissenting shares. The deadline for shareholders to demand dissenter's appraisal is Oct. 4, which is also the earliest date that the deal could close based on the mailing of the consent solicitation.

The waiting period for the antitrust review of the deal by the Department of Justice expires Oct. 1.

However, the deal might not close until about mid-October to provide time for the financing to close, a source said.

Jefferies Finance LLC and RBC Capital Markets have committed to provide senior secured financing of $680 million and the debt commitment provides for a 15-business-day period to line up the facilities. That period cannot begin before Sept. 4, but might not start until after antitrust approval is in hand.