Elliott Management bidding $2.35B to buy Compuware

Motivated by the business software maker's "underperformance," an activist hedge fund is making a large bid for Compuware.

Elliott Management, an activist hedge fund firm, is bidding approximately $2.35 billion to buy IT software and services provider Compuware, according to multiple reports on Monday.

That bid translates into roughly $11 per share, and Bloomberg pointed out that represents a 15 percent premium over the company’s closing stock price of $9.53 on Friday, December 14.

The Associated Press reported that Elliott already holds an 8 percent stake in Compuware, and that the investment firm is "confident that it can find financing for such a deal and wants to meet with the company's board as soon as possible."

Highlighting that this move comes several months after pushing BMC Software to also sell, The New York Times's Dealbook blog cited a memo from Elliott portfolio manager Jesse Cohn to Compuware's board today.

In the memo, Cohn wrote this offer was motivated by the business software maker's "underperformance."

“Compuware is a long-established company that we have followed closely for several years,” he wrote. “We believe in the quality of Compuware’s assets – however, its execution, profitability and growth have meaningfully underperformed.”

As news of the potential takeover hit the wires this morning, Compuware stock on the Nasdaq is up to roughly $10.78 per share.


Screenshot via Google Finance