Elliott Offers to Acquire Compuware for $2.3 Billion

Compuware Corp. (CPWR) hired Goldman Sachs Group Inc. (GS) and Allen & Co. to review the $2.3 billion takeover bid it received this week by Elliott Management Corp., said people familiar with situation.

The company also hired Skadden Arps Slate Meagher & Flom LLP as legal adviser on the strategic review, said one of the people, who asked not to be identified because the decision hasn’t been made public.

Elliott, the New York-based hedge fund that forced Novell Inc. to sell itself to Attachmate Corp. last year, offered $11 a share for Compuware on Dec. 17. The Detroit-based software company acknowledged the offer in a statement the same day, saying its board “will review all aspects of the proposal in consultation with its financial and legal advisers in due course.”

A spokesman for Goldman Sachs declined to comment. Representatives for Compuware, Allen & Co. and Skadden Arps didn’t respond to requests for comment.

In a Dec. 17 letter to Compuware, Elliott said it holds an 8 percent stake in the software company whose “execution, profitability and growth have meaningfully underperformed.” Elliott said it’s prepared to meet with Compuware immediately to discuss a transaction and that it is “confident” that it can obtain financing for the deal.

The stock, which has climbed 30 percent this year, closed at $10.85 today in New York, almost unchanged.

Elliott’s Investments

Elliott made an unsolicited $2 billion offer for Novell Inc. in 2010 after building an 8.5 percent stake in the Linux software developer. Novell was bought last year by Attachmate Corp. for $2.2 billion.

More recently, Elliott pressed BMC Software Inc. for several months to consider a sale, resulting in a $1 billion share buyback announced Oct. 31.

Sales at Compuware are projected to fall about 2.7 percent to $982.1 million in 2013, according to data compiled by Bloomberg. The company’s products include mainframe applications, collaboration technology, project management tools, and application performance management services for cloud and mobile applications.

To contact the reporter on this story: Serena Saitto in New York at ssaitto@bloomberg.net

To contact the editors responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net; Tom Giles at tgiles5@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.