BMC Software (NASDAQ:
) is on the rise again Tuesday on word of buyout interest from
two separate firms.
that Kohlberg Kravis Roberts & Co. (NYSE:
) and TPG Capital have separately expressed interest in buying
the Houston software firm. At this point, BMC hasn't initiated a
sale process, as notes Bloomberg.
Another Period of Uncertainty?
Investors may recall the awkward battle between BMC and Elliot
Associates in 2012. Elliot acquired over five percent of BMC in
May and informed BMC of its intention to nominate five board of
Elliot sought to pursue a sale of the company. BMC's board
unanimously rejected the proposal and a bitter back-and-forth
In connection with Elliot's efforts, BMC adopted a "poison
pill" policy. Under the policy, if a person or group acquired at
least 10 percent of BMC without approval from the board,
shareholders would have one preferred stock purchase right for
each share of common stock held.
With that right, each shareholder - other than the one who
made the purchase of 10 percent or more of the firm - would have
been able to purchase additional shares of common stock at twice
the exercise price of the right.
Effectively, BMC dug in its heels and prevented a hostile
takeover with the said policy.
After the initial dust settled, BMC reached an agreement with
Elliot. BMC agreed to add two of Elliot's nominees to the board
BMC ultimately explored several options including
acquisitions, spin-outs, stock splits or a sale, as notes
Bloomberg. However, in late 2012, the company decided it would
buy back $1 billion worth of stock,
according to Bloomberg
Note that Elliot currently lies close to the 10 percent
threshold, owning 9.37 percent of BMC,
according to Yahoo Finance
. The "poison pill" policy expires in May unless the board
decides to renew it.
Sell BMG, Buy BMC?
On March 1, KKR announced the sale of its stake in
Berlin-based music company BMG to Bertelsmann. Bertelsmann is an
international media company based in Gutersloh, Germany.
KKR Purchases Solar Projects
The BMC purchase would be the second in the last month for New
York City-based KKR.
On February 15, the company announced the purchase of three
solar photovoltaic projects from an affiliate of Greenwich,
Connecticut-based Starwood Energy Group. The projects are located
in Ontario, Canada - the largest power market in America's
northern neighbor. Terms of the transaction were not
On Monday, KKR rose one percent, likely on word of the buyout
Meanwhile, BMC rose 1.7 percent on Monday and is up close to
2.5 percent in the pre-market on Tuesday.
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