(Adds more details on buyout moves, background on previous
efforts, share movement)
By Nadia Damouni and Greg Roumeliotis and Nicola Leske
NEW YORK, Aug 2 Management software company
Compuware Corp CPW.O has renewed efforts to sell itself,
courting not just the buyers of rival BMC Software Inc BMC.O
but also CA Technologies Inc (CA.O) and other buyout firms,
several people familiar with the matter said.
Compuware rejected a $2.3 billion offer from New York-based
hedge fund Elliott Management Corp in January and asked Goldman
Sachs Group Inc (GS.N) and Allen & Company to seek a better
offer. Seven months later, no higher bid has emerged.
The company however has held early talks with the private
equity consortium that is in process of taking over BMC. Its
advisors have also asked CA Technologies, as well as private
equity firms that could seek to partner with another company in
the software sector, to make indicative offers this month, the
people said this week.
It could not be learned whether CA Technologies would
respond positively to Compuware's overtures and pursue a bid.
Compuware shares jumped to a three-month high on the news
and ended trading up 2.4 percent at $11.72.
A consortium led by Bain Capital LLC and Golden Gate Capital
LLC, which agreed in May to buy BMC for $6.9 billion, is
interested in merging it with Compuware but is not likely to
start full-fledged negotiations until September, some of the
This is because their takeover of BMC has yet to clear some
regulatory hurdles that include a review by Chinese authorities.
Even though these milestones are seen as formalities, Bain
and Golden Gate want to take no chances and are currently
focused on finalizing the necessary financing and closing the
transaction by September, the people said.
However, some preliminary discussions between the BMC's
pending new owners and Compuware have already taken place and
have identified as much as $200 million in annual cost savings
that BMC could bring to Compuware in a deal done with relatively
little new equity, the people added.
Compuware, CA Technologies, Bain, Golden Gate and Goldman
Sachs declined to comment while Allen did not immediately
respond to a request for comment.
Despite the synergies, negotiations are likely to be tough.
The buyout firms acquiring BMC view Compuware's business as
challenging and its offerings in the large computer system
segment, referred to as mainframe, not as exciting as BMC's, the
It is also uncertain whether Compuware will have any success
in finding a willing buyer other than BMC given its previous
efforts. Several private equity firms gave up on the company
after exploring a possible deal earlier this year, the people
In a sign Elliott is willing to facilitate a deal, it
extended its standstill agreement with Compuware to September
15. Last month, it agreed to roll some of its shares in BMC into
that takeover, offering it visibility on both fronts.
Elliott is a also shareholder in business software company
Attachmate Corp, alongside Golden Gate, Thoma Bravo LLC and
Francisco Partners LP. The people however said that Attachmate
would not participate in any deal with Compuware.
Elliott declined to comment.
(Reporting by Nadia Damouni, Greg Roumeliotis and Nicola Leske
in New York; editing by Andrew Hay)
((Greg.Roumeliotis@thomsonreuters.com)(+1 646 223 6022)(Reuters
Keywords: COMPUWARE SALE/
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