Plato Ups Bid for Renaissance; Rejected Again

Plato Learning's newest proposal calls for it to acquire all shares of Renaissance Learning for about $496 million-or roughly $16.90 per share-but the majority owners have pledged their shares to a $455 million buyout offer from a European private equity firm.

Bloomington-based Plato Learning, Inc., is still gunning for educational software company Renaissance Learning, Inc., and upped its buyout offer for a second time on Friday-but the majority owners and board continue to favor a lower offer from a company formed by European private equity firm Permira Funds.

According to Wisconsin Rapids, Wisconsin-based Renaissance, Plato on Friday raised its bid to $496 million-or roughly $16.90 per share.

Since August, Plato has been in a bidding war with Permira. On August 15, Renaissance and Permira struck an agreement under which Permira would pay $14.85 per share in cash, or about $440 million, for Renaissance. But in late August, Plato countered Permira's bid, offering to pay $455 million-a bid that Permira then matched.

Late last month, Plato upped its bid and agreed to pay $15.10 for each share owned by Renaissance co-founders Terrance and Judith Paul, who control 69 percent of the company's shares, and $18 for all other shares-for an aggregate purchase price of $471 million. Following that offer, Renaissance's board said that the Pauls still favored Permira's revised $455 million bid, and it entered into an amended agreement under which it would be sold for that price; Permira's offer would give the Pauls $15 in cash for each of their shares and pay $16.60 in cash for all other shares.

Meanwhile, Plato's latest bid allows the Pauls and the Renaissance board of directors to allocate the merger consideration in any manner they choose.

“The Pauls have informed Renaissance Learning's board of directors that they will not support an acquisition of Renaissance Learning by Plato Learning pursuant to Plato Learning's revised definitive proposal,” Renaissance said in a Tuesday news release, later adding: “Renaissance Learning's board of directors has approved and continues to recommend that shareholders approve and adopt the amended Permira Funds merger agreement.”

Renaissance shareholders are scheduled to convene at a special meeting on Monday, where they'll approve a buyout offer.

When asked why the Pauls and the Renaissance board continue to favor the Permira offer, a Renaissance spokesman said he couldn't comment beyond the news releases that have been issued.

Plato Learning-which was acquired by Thoma Bravo, LLC, in May 2010-provides online education services for kindergarten through adult learners.

Shares of Renaissance's stock were trading down 1 percent at $16.84 mid-day Tuesday.