- Published: 17 December 2012
- Written by Editor
Elliott Offers To Acquire Compuware For $11.00 Per Share In Cash
Activist Investor Uniquely Positioned To Maximize Shareholder Value
Elliott Management Corp, affiliates of which own or have an interest economically equivalent to 8.0% of the common stock of Compuware Corporation (CPWR), today sent the following letter to the company's Board of Directors offering to acquire the company for $11.00 per share in cash, or an aggregate of $2.3 billion. Elliott is a multi-strategy investment firm with deep experience investing in public and private companies and an extensive track record of successfully structuring and executing transactions in the technology space.
December 17, 2012
The Board of Directors
One Campus Martius
Detroit, Michigan 48226
Dear Members of the Board of Directors:
I write to you on behalf of Elliott Management Corp. and its funds Elliott Associates, L.P. and Elliott International L.P. (collectively, "Elliott") which collectively own, or have an interest economically equivalent to, 8.0% of the common stock of Compuware Corporation ("Compuware"), making Elliott one of the Company's largest stockholders. Elliott is a multi-strategy investment firm with over $20 billion in assets under management focused on employing detailed research to address complex investment situations. We have considerable experience in the technology sector involving both public and private investments.
Based on our detailed review of the Company's publicly available information and our substantial knowledge of the software industry, we are pleased to submit this proposal to acquire all of the shares of common stock of Compuware for a price of $11.00 per share. Our offer represents a premium of 25% over the Company's unaffected market value as of the date Elliott filed its Schedule 13D last month. This price also represents a 21% premium over the Company's 30-day volume-weighted average price ("VWAP"), a 24% premium over the Company's 60-day VWAP and a 24% premium over the Company's one-year VWAP. Finally, this price represents a premium of 15% over the Company's current market value which we believe is substantially inflated as a result of Elliott's 13D, a filing to which the Company has repeatedly drawn attention in public and private settings. Substantiating this belief is the fact that since November 26th when we filed our 13D (just 3 weeks ago), Compuware's stock price has outperformed the NASDAQ by 9 percentage points and the S&P 500 by 8 percentage points. By any measure, we believe our proposal represents a compelling opportunity that your stockholders will find extremely attractive.
Compuware is a long-established company that we have followed closely for several years. We believe in the quality of Compuware's assets – however, its execution, profitability and growth have meaningfully underperformed. Prior to the filing of our 13D, Compuware's stock has underperformed the Nasdaq and S&P 500 by an average of 6 and 34 percentage points over the last one and two years, respectively.
As a result of Elliott's significant experience in the software sector and our deep public diligence into Compuware, we believe Elliott is uniquely situated to deliver maximum value to the Company's stockholders. Elliott has over 35 years of experience in investing in public and private companies and an extensive track record of successfully structuring and executing acquisitions in the technology space. Our proposal is of course subject to a confirmatory due diligence review of the Company as well as the availability of reasonable financing. We are available to sign an appropriate confidentiality agreement and commence due diligence immediately. We are also confident we can obtain financing and have already had conversations with financing sources. Elliott is prepared to devote considerable resources to completing this transaction and we are confident that, with your cooperation, we will be in a position to execute a definitive transaction agreement on an expedited basis.
We are prepared to meet immediately with you and your advisors in order to answer any questions about our proposal and to work out the details for moving toward a definitive transaction agreement.
Of course, nothing in this letter is intended to create a legally binding obligation and no such obligation will exist unless and until a definitive transaction agreement is executed. As a result of our substantial share ownership in Compuware, SEC rules oblige us to make the existence and contents of this letter public. Please feel free to contact me to discuss or clarify any aspect of this proposal.
On behalf of Elliott, we are very much looking forward to working closely with the talented employees of Compuware to bring the Company forward to its next phase of growth.
Very truly yours,
About Elliott Associates
Elliott Associates, L.P. and its sister fund, Elliott International, L.P. have more than $20 billion of capital under management. Founded in 1977, Elliott is one of the oldest hedge funds under continuous management. The Elliott funds' investors include large institutions, high-net-worth individuals and families, and employees of the firm.