11:46 a.m. | Updated
Compuware said on Friday that its board had rejected a $2.3 billion takeover bid by Elliott Management, arguing that the hedge fund’s offer was too low.
Instead, the business software maker said that it was focused on its own corporate turnaround blueprint, including a three-year plan to cut costs and an effort to spin off its Covisint business communication products arm. It also unveiled plans to pay a 50-cent quarterly dividend, beginning next quarter.
Compuware said that Elliott’s offer of $11 a share, made last month, would not deliver enough value to shareholders, compared to the improvements that its self-help plan would yield.
“We believe that selling the company at $11.00 per share does not take into account our progress returning the business to profitable growth and our future prospects,” Bob Paul, the company’s chief executive, said in a statement.
The decision by Compuware sets up a potential clash with Elliott, which has managed to score some big wins in its battles with technology companies. It bid for Novell, leading the software maker to sell itself to Attachmate for $2.2 billion.
People close to Elliott have argued that the hedge fund was fully prepared to pay the $2.3 billion it had offered for Compuware. But the hedge fund also believed that private equity firms would also express interest.
Though shares in Compuware began rising after Elliott disclosed an 8 percent stake in the company in November, they have remained largely below the $11-a-share offer, implying investor skepticism about a deal being done. The stock closed on Thursday at $10.76.
Jesse Cohn, the Elliott portfolio manager overseeing the hedge fund’s bid, said in a statement: ““This is a good outcome. Compuware has granted our request for access to diligence to confirm an offer for the company. We will immediately reach out to negotiate an appropriate N.D.A. and look forward to moving quickly to engage in diligence with the help of our legal and financial advisors. We remain very interested in the company.”
DealBook: Compuware Rejects Elliott's $2.3 Billion Bid
This article
DealBook: Compuware Rejects Elliott's $2.3 Billion Bid
can be opened in url
http://newsshirter.blogspot.com/2013/01/dealbook-compuware-rejects-elliott-23.html
DealBook: Compuware Rejects Elliott's $2.3 Billion Bid
