Software firm Compuware has reportedly begun considering a potential buyout from Elliott Management Group, which submitted a bid of $2.3 billion for the Detroit, Michigan based company. Elliott already holds an 8 percent stake in Compuware but hopes to acquire complete control in the company. Representatives with Elliott said it hopes to improve Compuware's rate of growth, profit and general business practices, arguing that the business has "meaningfully underperformed" in those areas. Elliott has offered $11 per share.
Compuware's stock has risen by about 30 percent since the beginning of the year, but projections from Bloomberg predict the company's sales to drop by approximately 2.8 percent to $982.1 million by the end of 2013. According to an anonymous source close to the company, Compuware has hired Goldman Sachs to review the potential sale, but representatives with the investment giant declined to comment on the claims. The source asked not to be named as the details of the prospective agreement have yet to be released to the public.
Additionally, the firm has contracted a law firm to serve as a legal adviser on the strategic review of the sale offer. An independent legal review of such an important and high-value sale is necessary to ensure all aspects of the sale and potential ramifications have been considered. Spokespeople with Compuware said they and their consultants will complete a full analysis of the deal "in due course." Compuware produces and sells several types of software, including project management applications and performance management tools for mobile and cloud services.
Elliott Management Group made headlines in October when BMC Software announced a $1 billion repurchase of its own shares after months of Elliott pressuring it to consider a sale. In 2010, Elliott offered $2 billion for full control of Novell Inc. after purchasing 8.4 percent of its shares. However, Novell ultimately accepted a $2.2 billion bid from West Cost based software developer Attachmate Corporation.
Source: Bloomberg, "Elliott Offers to Acquire Compuware for $2.3 Billion," Serena Saitto, Dec. 20, 2012
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