SumTotal's 2nd largest shareholder sees higher bids

* Discovery Group: Will not be surprised by increased bids

* Says Accel-KKR's raised breakup fee is hurdle for Vista

* Says does not want a breakup fee at all

By Deepti Govind

BANGALORE May 22 (Reuters) - The second largest shareholder of SumTotal Systems Inc (SUMT.O), which is currently at the heart of a bidding war between Accel-KKR and Vista Equity Partners, said it would not be surprised to see the "bid increase somewhat from this point".

"The reason they are rebidding for the No. 1 market share player in human capital management business and enterprise software" is because SumTotal provides exceptionally good value for an acquirer at current depressed share levels, Dan Donoghue, Managing Partner of Discovery Group, told Reuters.

SumTotal shares, which hit a 52-week high of $5.15 on July 24, were trading at $2.01 before Vista's first bid on April 6.

The latest offer from Vista, SumTotal's largest shareholder, stands at $4.85 a share, while Accel-KKR's bid stands at $4.80 a share.

SumTotal, which has agreed to Accel-KKR's last bid, has till Tuesday to negotiate with the firm for a better deal. [ID:nBNG452730]