Why Websense Shares Popped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Websense were skyrocketing today, up as much as 29% after the web-security specialist agreed to be bought out for $907 million.

So what: Vista Equity Partners offered to take Websense private for $24.75 a share, or the equivalent of $907 million, all in cash. The Websense board said it had explored proposals from several potential acquirers, and the offer represents a 29% premium over Websense's closing price on Friday at $19.23. Websense has been in the process of converting from a web-screening and blocking service to one focused on Internet security.

Now what: Websense's share price today has come within pennies of Vista's offering price, indicating a high level of confidence that the deal will go through as agreed. The deal looks like a win for Websense shareholders, as the stock price is now double nearly what it was last fall. From here the question seems to be what implications the buyout has for other web-service companies.

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The article Why Websense Shares Popped originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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