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Private Equity Firms Consider Takeover Bid For Compuware

Several private equity firms are contemplating submitting a proposal to takeover Compuware Corporation (NASDAQ:CPWR), a business software company, according to report from Financial Times.

Early this year, the board of directors of Compuware Corporation (NASDAQ:CPWR) rejected the $2.3 billion or $11 per share offer of activist investor Paul Singer’s Elliot Management Corporation to acquire the company. The board said the bid “significantly undervalues” the company and it is not in the best interest of its shareholders. The investment management firm and its affiliates own 8.7% stake in the company as of July.

Vista Equity is a potential buyer

One of the private equity firms interested in acquiring Compuware includes Thoma Bravo and Vista Equity Partners, a buy-out firm based in San Francisco. According to people familiar with the situation, the firm talked to the management of Compuware regarding the idea of taking the company private.

There are other private equity firms that entered into negotiations with Compuware Corporation (NASDAQ:CPWR), according to the sources. Discussions with the business software company were at different stages.

Interested buyers are expected to offer an acquisition price higher than the $2.3 billion proposal of Elliot Management Corporation. Last November 14, Bob Paul, CEO of Compuware Corporation (NASDAQ:CPWR) told Reuters that there were no submitted takeover proposals high enough to convince the board to sign an agreement.

Compuware Corporation (NASDAQ:CPWR) engaged the services of Goldman Sachs Group Inc (NYSE:GS) help evaluate its options. People familiar with the situation said the business software company had been exploring the possibility of selling itself over the past few months. One of its largest shareholders, Starboard Value LP is pushing for a sale or the implementation a new restructuring plan.

Firms may be interested in merging Compuware

Last May, a group of buyers led by Bain Capital LLC and Golden Gate Capital LLC acquired Compuware’s competitor, BMC Software, Inc. (NASDAQ:BMC) for $6.9 billion. The group is interested in combining the companies, but it has not made a move to realize its objective.

The shares of Compuware Corporation (NASDAQ:CPWR) are trading around $11.04 per share on Wednesday around 3:14 P.M. in New York. The trading price of the stock is only $0.04 higher than the $11 per share acquisition price offered by Elliot Management Corporation.