Buyout firm reveals its bid for Internet-security company WatchGuard

Vector Capital, a buyout firm focused on software makers, renewed its two-month effort to buy Internet-security company WatchGuard Technologies by disclosing an offer price of $5.10 a share.

The offer announced today in a regulatory filing from Vector, WatchGuard's second-largest shareholder, values WatchGuard at $175.8 million based on 34.5 million shares outstanding on April 30. That's an 11 percent premium to Tuesday's share price. San Francisco-based Vector offered to buy the company in March for an undisclosed sum.

WatchGuard, of Seattle, said last month it had hired Wachovia to seek alternatives. Shares of WatchGuard rose 26 cents, or 5.6 percent, to $4.87 as of 11:27 a.m. New York time in Nasdaq Stock Market composite trading. They've risen 9.4 percent since Vector's March offer was announced.

"The lengthy process that the company and Wachovia have undertaken has not yielded a firm proposal in the desired range," Vector said in the statement. "We believe that WatchGuard shareholders now prefer a sale of the company as soon as possible to the highest cash bidder."

WatchGuard spokesman Jeff Wenker didn't return a call seeking comment. The company sells security software directly to Internet service providers and has posted a net loss every year since going public in 1999.