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US software company Compuware rejects $2.3bn Elliott buyout

25 Jan 2013

US software company Compuware Corporation has rejected the proposed buyout offer from hedge fund group Elliott Management Corporation.

It said the offer of $11 per share “significantly undervalues” the company and is not in the best interest of shareholders. The deal valued the company at close to $2.3bn.

“We are committed to creating value for shareholders and the actions announced today are focused on increasing profitability, building on the momentum of our transition to higher-growth businesses, and returning capital directly to shareholders,” said Bob Paul, chief executive officer.

“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. We are confident our plan will accelerate our progress and provide significant, near-term returns as well as future upside to our shareholders. While we are focused on executing and delivering on our plan, the board will carefully review and evaluate any credible offer it receives, including from Elliott, that delivers full value to its shareholders.”

The company executed a spin-off of Covisint to Compuware shareholders, distributing the remaining Covisint shares.

“We believe the execution of this plan will drive the growth of our key businesses, improve our margins and unlock the substantial value inherent in our company,” added Paul.

Eliott currently holds a 6.6 per cent stake in the company.

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