Captaris, Inc. (NDAQ: CAPA) may be able to efficiently manage business data, but a strategic review of its own company is another story. Private equity firm Vector Capital offered to acquire the software company for $4.75 per share just last week, but the deal fell through after the company failed to take any decisive action. Now many shareholders are left wondering whether any deal will be done at all.

The news of Vector's offer came just a day after Captaris announced that it received unsolicited inquires from multiple parties about a possible transaction. The company then worked to establish a special committee of independent directors to evaluate strategic alternatives. It also hired RBC Capital markets as its financial advisor to help explore its options.

The problem came when the Captaris refused to accept a generous offer from Vector. The private equity fund was willing to sign an acquisition agreement that would allow the company to continue shopping for other higher bids while reimbursing them up to a million dollars for any legal expenses. Since many auction processes fail, this would provide investors for a fail-safe premium.

Unfortunately, Captaris rejected the offer for some reason. Vector immediately came out saying that it was "extremely disappointed" by the company's refusal to engage in meaningful discussions over their offer. This is especially true since many other large investors, including hedge fund Emancipation Capital, came out in support of the generous acquisition agreement.

"Our offer represents immediate and certain value, does not preclude the continuation of [the company's] exploration of other strategic alternatives, and thus would clearly be in the best interests of all Captaris shareholders," Vector said.

Emancipation Capital supported this notion and urged the company to move forward in signing the acquisition agreement. The hedge fund noted that by entering into the agreement, shareholders are assured of a price premium and have a reasonable shot at a higher offer without the risk of a failed auction. It also suggested that the company seek a higher price from Vector as a condition of the agreement as well as a lengthened go-shop timeline.

Captaris responded blandly yesterday by encouraging Vector to participate in its process of reviewing strategic alternatives on a fair and equal basis with other potential bidders. It also noted that it would evaluate any offer from Vector "on an equal footing with proposals from other interested parties." Today, Vector announced that Captaris has gone ahead and rejected the bid.

The move has many shareholders wondering just what happened. The only justification could be a substantially higher offer in the works by another party interested in acquiring the company. But then, why would it refuse entering into what would essentially be a standby offer? And why wouldn't it seek a higher bid instead of simply rejecting the offer? These are all questions that many shareholders are now looking to have answered.

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