By Gillian Tan

A Delaware corporate law judge said Tibco Software Inc. can proceed with a shareholder vote on its $4.2 billion sale to Vista Equity Partners, despite a spreadsheet error that cost the company’s shareholders about $100 million.

Chancellor Andre G. Bouchard rejected a Tibco shareholder’s request to halt the vote until after a trial of its lawsuit challenging the deal. The shareholder wants Vista to pay 58 cents per share more for Tibco, saying the use of an overstated share count in crunching the deal value shortchanged investors.

— Andy McMillan for The Wall Street Journal

The source of the error was a spreadsheet used by Goldman Sachs Group Inc., Tibco’s financial adviser, that misstated the company’s share count. Vista then used the incorrect share count to calculate Tibco’s equity value to the tune of $100 million less than it should have been.

A Goldman employee spotted the spreadsheet error nearly a week after the deal was announced, saying in an Oct. 5 email that the spreadsheet’s “aggregate value calculation” for Tibco “doesn’t look right,” according to court filings.

Goldman, however, didn’t discover that Vista had used the incorrect share count until Oct. 15, and the bank didn’t inform Tibco’s board of that fact until Oct. 23, according to the ruling. Goldman contended that it told a lawyer for the board of the mistake the same day it learned of the error, but in his ruling the judge said “there is nothing to support this assertion.” Goldman has also argued that it would have been “nearly impossible” to have caught the error based on Tibco’s public filings, according to court filings.

Despite the error, Tibco’s board didn’t seek a higher price, and instead reiterated its recommendation to shareholders to vote in favor of the deal. All told, seven lawsuits challenging the deal have been filed.

Mr. Bouchard said it was “troubling” that Goldman knew for more than a week that Vista used the wrong number before telling Tibco’s board, but he said delaying a vote on the deal would “harm Tibco’s stockholders by unnecessarily delaying them from receiving $24.00 per share if they decide to approve the merger.”

Still, Mr. Bouchard didn’t let Goldman off unscathed.

“Such advisors, like the ones here, often are richly compensated to perform these functions. In this case, however, a significant open question lingers concerning the basic competence with which the mechanics of the bid process were handled,” he wrote in his ruling.