Compuware Going Private?

 

After previously sparring with Elliott Associates over a takeover offer, Compuware decides to take its ball and go home.  And invites Elliott Associates.

The always awesome Elliott Associates previously made a $3.2 billion bid for Compuware Corporation (CPWR).  The market took it seriously since the stock price hovered just below the $11.00/share offer price until late January when the stock price began to exceed the offer price.  At this writing, CPWR closed at $11.73.

Elliott claimed that its offer represented a premium of:

  • 25% over CPWR’s unaffected market value as of the date Elliott filed its Schedule 13D;
  • 21% premium over the 30-day volume-weighted average price (“VWAP”);
  • 24% premium over the 60-day VWAP;
  • 24% premium over the one-year VWAP; and
  • 15% over the then-current market value, which may have been substantially inflated as a result of Elliott’s 13D.

Compuware responded by spitting in the general direction of the offer price and putting forward a turnaround plan involving:

  • a $60 million cost reduction plan;
  • a spin-off of its Covisint subsidiary following an IPO of Covisint; and
  • a $0.50/share annual dividend.

Well, the turnaround plan does not seem to have been the bulwark against aggression that Compuware expected because reports are stating that Compuware has met with private equity firms regarding a deal to go private.  Named suitors include Blackstone, TPG Capital and Golden Gate Capital.

Guess who else may be in the mix.  Go ahead, guess.  Yes, Elliott Associates.

Elliott updated its Schedule 13D to disclose that it had entered into a confidentiality agreement with Compuware for Compuware to provide non-public information in connection with Elliott’s offer to acquire it.  The barbarians have kicked in the gate.  After all, they have their own navy now.

Links:
Elliott December 2012 Schedule 13D/A
Elliott February 2013 Schedule 13D/A
Compuware Press Release

This entry was posted in Activist Investor, Elliott Associates, Hedge Funds, IPO, M&A, Private Equity, Spinoff and tagged , , , , , , , , , , , , . Bookmark the permalink.

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