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Rising speculation over computer company buy-out

Michigan's largest computer tech firm, Compuware, could not be reached for comment following recent rumors that it is about to be bought out by several private-equity companies. Earlier this year, the company board turned down a cash offer of $2.3 billion from a hedge fund based out of New York. The offer was not solicited but originated from one of its more substantial shareholders.

The January offer from Elliott Management put Compuware's shares at $11 each. The company just went public in fall after spinning off from Covisint, a cloud-computer firm. Compuware's board went through significant changes this year, too, including the founder's retirement and two board members stepping down.

A report in Financial Times recently claimed that two of the private-equity firms interested in Compuware are Vista Equity Partners out of San Francisco and Thoma Bravo out of Chicago. The Financial Times says the information about the possible buyout came from "unnamed sources.

Whenever there are rumors of a firm's potential buyout, speculation abounds as to the reasons why. After Compuware rejected Elliott Management's offer, the company announced that it would be cutting jobs, as well as scaling way back on expenses - $80-$100 million worth. The company hired Goldman Sachs to deal with any future buyout offers and stockholders received a dividend for the first time.

The buying and selling of businesses is quite complex and requires extensive knowledge of the law, including regulations that may thwart such dealings. Knowledgeable business attorneys can help ensure that such deals are completed, while still protecting the interests of the company.

Source:, "Compuware the subject of more buyout speculation" JC Reindl, Nov. 27, 2013

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