Aladdin says receives buyout offer from Vector Capital

(Reuters) - Israel-based Aladdin Knowledge Systems Ltd ALDN.O said it received an unsolicited offer from private equity firm Vector Capital to acquire the software security firm, and that it is reviewing the proposal.

As a potential alternative to a full buyout, Vector Capital also proposed a possible acquisition of the company's digital rights management software business, with Aladdin repurchasing its shares held by Vector Capital.

Vector Capital's alternative proposal includes the sale of the authentication business of its affiliate SafeNet Inc to Aladdin.

Vector Capital holds a 10.2 percent stake in Aladdin, according to Reuters data.

Credit Suisse Securities is the financial adviser for Aladdin, which directly competes with Vector's SafeNet, and Herzog, Fox & Ne'Eman is its Israeli counsel.

Aladdin shares were up 8 percent at $12.27 in afternoon trade on Nasdaq.

(Reporting by Deepti Govind in Bangalore; Editing by Deepak Kannan)