Compuware rejects Elliott Management's $2.3-bn takeover offer; to spin-off software unit Covisint
28 Jan 2013
US-based business software maker Compuware Corp rejected a $2.3 billion takeover offer from activist investment firm Elliott Management Corp over the weekend and instead decided to go ahead with spinning-off a non-core unit.
Compuware said it would proceed with the IPO of its cloud software unit Covisint, and then spin it off to its shareholders.
Elliott Management, which holds an 8-per cent stake in Compuware, had in December 2012 offered to buy the Delaware, Michigan-based company for $11 per share after it raised questions about the profitability and growth of the company.
Elliott had said that Compuware had underperformed against the Nasdaq Composite and S&P 500, and it believed in the value of the company's assets but that ''its execution, profitability and growth have meaningfully underperformed.''
Commenting on the Elliot's offer, Bob Paul, CEO of Compuware, said, "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."
However, the Board will carefully review and evaluate any credible offer it receives, including from Elliott, that delivers full value to its shareholders.''
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