Hedge fund Elliott Management launches $2.3-bn bid for mainframe software maker Compuware

New York-based hedge fund Elliott Management Corp yesterday launched a $2.3 billion unsolicited bid for the rest of Compuware, a software and service solutions company for the management of mainframe systems.

The bid pitched at $11 a share is a 15 per cent premium over Compuware's 14 December closing price of $9.53.

Elliott, the $20-billion fund founded by billionaire Paul Singer, which already holds 8 per cent in Compuware, said that it is ''confident'' that it can secure financing for the deal and wants to enter into discussions with the company's board as soon as possible.

In a letter to Compuware's board, Elliot's management portfolio manager, Jesse Cohn, wrote ''we believe in the quality of Compuware's assets. However, its execution, profitability and growth have meaningfully underperformed.'' Cohn added, ''As a result of Elliott's significant experience in the software sector and our deep public diligence into Compuware, we believe Elliot is uniquely situation to deliver maximum value to the company's stockholders.''

Responding to Elliot's offer, Compuware said that its board ''will review all aspects of the proposal in consultation with its financial and legal advisers in due course.''

Founded in 1973 by Peter Karmanos Jr., Detroit-based Compuware manages the information technology departments of large businesses.