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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.
[Read: <a target="blank" data-add-tracking="true" href=""><em>5 Must-See Charts of Big Trades to Take This Week</em></a>]

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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