Apollo Global Management Inc. sweetened its offer for Tech Data Corp. to ward off a competing bidder for the Clearwater IT distributor.
The competing bidder reportedly was Berkshire Hathaway, the conglomerate headed by Warren Buffett, according to CNBC.
Funds managed by Apollo now will pay $145 a share for Tech Data (Nasdaq: TECD) stock, about 11.5 percent more than the $130 the private equity giant previously offered. That brings the total deal value to about $6 billion, Tech Data said in a news release.
Tech Data’s board approved the revised bid from Apollo and recommended shareholders vote in favor of the deal.
However, Tech Data — the largest company headquartered in the Tampa-St. Pete area — still could be in play. Tech Data still has until the end of day Dec. 9 to look for a better offer, the news release said.
Buffett makes a bid
Tech Data initially disclosed on Nov. 13 that it had agreed to be acquired and taken private by Apollo for $5.4 billion, but the deal included a “go shop” provision, allowing Tech Data to look for a better offer. On Nov. 23, an unidentified public company made what Tech Data’s board considered a superior offer, and on Nov. 24, the board decided to terminate the Apollo deal and take the offer from the public company.
But after Apollo came back with its revised offer on Nov. 27, the Tech Data board decided the public company’s proposal was no longer superior.
Although Tech Data did not identify the other bidder, CNBC said it was Buffett’s Berkshire Hathaway (NYSE: BRK-A, BRK-B). Buffett said a week ago he bid $140 a share, or just over $5 billion excluding debt, for Tech Data. After Tech Data accepted Apollo’s revised offer, Buffett said he does not intend to make a higher offer, CBNC said.
Tech Data amended its agreement with Apollo to include the higher purchase offer.
Related story: Seven things to know about the Tech Data deal
The amended agreement also makes it more expensive for either company to end their deal by raising the break-up fees.
If Apollo fails to close the deal by Aug. 12, 2020, Tech Data would be entitled to a termination fee of $315.9 million. If Tech Data accepts a better offer from another buyer before Dec. 10, Tech Data would pay Apollo $89.5 million. If the Tech Data board changes its mind about the deal or otherwise breaches the agreement, Tech Data would pay Apollo $184.3 million.
Tech Data said it still expects its deal with Apollo to close in the first half of calendar year 2020, pending regulatory approval.
Tech Data’s stock closed Wednesday at $129 a share, just below the original Apollo bid. Tech Data announced its revised deal with Apollo after the market closed on Wednesday for Thanksgiving, and just before the market opened on Friday, Tech Data’s stock was trading around $144 a share, MarketWatch reported.