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The Deal: Covisint to Rally Support for IPO

"Since Covisint's assets are so different, it may help better facilitate another transaction with that asset off the books," the source said.

Compuware hinted that it might field better offers after rejecting on Jan. 25 an $11 per share, or $2.3 billion, offer from Paul Singer's Elliot Management, noting that the bid undervalued the company.

The hedge fund remains under a standstill agreement with Compuware until Sunday, Sept. 15.

Compuware also announced in its Jan. 15 statement that it had enlisted Goldman Sachs & Co. and Allen & Co. as financial advisors, while retaining Skadden, Arps, Slate, Meagher and Flom LLP as legal counsel to assist with future developments.

Though it may not be clear where Elliot's bid presently stands, another potential acquirer for Compuware is BMC Software (BMC), according to the industry source.

"BMC makes a good strategic fit with Compuware," the source said. "The mainframe industry has been undergoing consolidation and I do think there's more consolidation that makes sense."

Not only do the two companies have minimal product overlap, but Elliot is also a 9% holder of both Compuware and BMC, the source added.

"There's certainly some interests aligned there to forge a combination of the two," the industry source said.

-- Written by Sarah Pringle in New York

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