Elliott Management Joins BMC Software Buyer Group

Elliott Management Joins BMC Software Buyer Group
By World Economic Forum (Flickr: The Global Financial Context: Paul Singer) [CC BY-SA 2.0], via Wikimedia Commons

Elliott Management, the largest shareholder of BMC Software, Inc. (NASDAQ:BMC), joined a buyer group created by the affiliates of investment management firms Bain Capital, Golden Gate Private Equity, Insight Venture Management, and a company affiliated with GIS Special Investments  to take over BMC Software.

Elliott Management Joins BMC Software Buyer Group

BMC Software approved Elliott Management to rollover its shares

According to a press statement from BMC Software, Inc. (NASDAQ:BMC), the board of directors of the company approved the request of Elliott Management to rollover $137 million worth of its shares into a new stake in the software company once the buyout was complete and it becomes a private company. The board said the price of the rollover represents a premium to the investment price paid by the members of the buyer group.

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The board of directors of BMC Software, Inc. (NASDAQ:BMC) added that an amendment was made to the merger agreement with the buyer group. Under the amendment, the company has the right to revoke its consent for the rollover of Elliott Management’s shares in certain circumstances wherein it would reasonably result in a non-de-minimis delay of the consummations of the transactions in the merger agreement. If it would have an adverse impact in the ability of the company to secure approval of the merger from shareholders, the equity commitment letter entered into by Elliott Management related to the rollover is terminated under specific circumstances.

Based on a regulatory filing with the Securities and Exchange Commission (SEC), the proceeds from the rollover will be utilized for the $12.4 million payment to shareholders once the merger is completed. The company also plans to use a portion of the proceeds to settle pending litigations.

BMC Software stockholders approved the acquisition

BMC Software, Inc. (NASDAQ:BMC) also announced that its stockholders approved all proposals by the buyer group to acquire the company for $46.25 per share, which represents a premium of 14% of its trading price in May last year before Elliott Management pushed for changes in the company.

“We are excited to achieve the next milestone in this process and are pleased with the outcome of today’s vote. We thank our stockholders for their support and look forward to completing the remaining steps required to close the transaction. We believe this transaction will provide compelling opportunities for the future of BMC, and for our employees and customers around the world,” said Bob Beauchamp, chairman and CEO of BMC Software, Inc. (NASDAQ:BMC).

On the other hand, Jesse Cohn, portfolio manager at Elliott Management said the company “delivered a great outcome to shareholders with the sale transaction and further improved it with today’s enhanced deal.”

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