Business software maker Compuware Corp. turned down hedge fund Elliott Management Corp‘s proposal for a $2.3 billion buyout, choosing instead to proceed with spinning off a non-core unit, Reuters reported. Paul Singer’s Elliott Management had offered in December to buy Compuware for $11 per share, raising questions about the management of the company.
(Reuters) – Business software maker Compuware Corp. turned down hedge fund Elliott Management Corp’s proposal for a $2.3 billion buyout, choosing instead to proceed with spinning off a non-core unit.
Paul Singer’s Elliott Management had offered in December to buy Compuware for $11 per share, raising questions about the management of the company.
Elliott’s proposal significantly undervalues the company and is not in the best interest of shareholders, Compuware said in a statement.
Elliott had blamed Compuware for underperforming its potential and promised to turn it around if the deal went through.
Compuware said it would rather proceed with the IPO of its Covisint unit and cut costs.
The company, which filed for a possible Covisint IPO last year, is expected to sell a 20 percent interest in the offering and distribute the rest among its shareholders.
Eliott had declared an 8 percent economic interest in Compuware when it made the offer last year. According to the latest filing, it beneficially owns 14.2 million shares, or 6.6 percent of the outstanding shares.
Compuware also approved an annual dividend of 50 cents per share starting from the first quarter of fiscal 2014, which begins in April.
Compuware shares rose 2 percent to $11.00 before the bell on Friday.
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