This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Elliott's $2.3B Compuware Bid Kicks Off New Tech Takeover Bet

NEW YORK ( TheStreet) -- Hedge fund Elliott Management is offering to buy computer software as services specialist Compuware (CPWR) for $11 a share in cash, or $2.3 billion.

In a letter sent to Compuware's board of directors, Elliott Management unveiled the $11 a share offer and highlighted that its bid represents a 25% premium to Compuware's shares prior November, when the sometimes activist fund disclosed an 8% stake in the company.

Jesse Cohn, a manager of Elliott's tech portfolio, noted in the letter the fund's experience in tech sector investments and its ability to find financing for the prospective takeover. Still, the offer is not legally binding, and Cohn said the $11 a share price is subject to Elliott's ability to conduct due diligence.

"We are prepared to meet immediately with you and your advisors in order to answer any questions about our proposal and to work out the details for moving toward a definitive transaction agreement," wrote Cohn, in the letter.

It's too be seen whether Compuware rebuffs Elliott Management's takeover entreaties or whether the hedge fund's 8% stake will turn hostile.

While the move is a rare buyout offer for the hedge fund, which previously made a similar sized bid for software specialist Novell in 2010, it adds to an increasing list of bets in struggling tech sector stocks.

Earlier in 2012, Elliott Management advised BMC Software (BMC) to consider selling itself after taking a large activist stake in the networking and cloud software player. BMC Software rejected many of Elliott's management but this fall, the company said it had hired investment banks to field buyout offers.

The hedge fund also has made activist investments in tech giants like Iron Mountain (IRM - Get Report) and its bid on now private Epicor.

Novell, which rebuffed Elliott's takeover offers was eventually sold to privately-held Attachmate. The hedge fund also has benefited from a recovery in Brocade (BRCD - Get Report) after it took an 8% non-activist investment in networking equipment specialist in mid-2011, as the company's shares and earnings plummeted.

Compuware shares surged over 14% in late Monday morning trading to $10.90. The company's share gains now stand in excess of 25% for 2012, after gaining roughly that amount in the past month. BMC Software shares have only posted mixed performance since Elliott Management began publicly advocating for the company's sale in May.

For more on Elliott Management, see why its BMC Software bet was caught amid a cloud boom & tech sector gloom.

-- Written by Antoine Gara in New York

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BMC $0.00 0.00%
BRCD $8.16 -1.20%
CPWR $10.35 0.10%
IRM $37.09 1.60%
AAPL $94.19 -1.04%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs