Several new private equity funds, such as Apax Partners LLP
and Hellman & Friedman LLC, have emerged as prospective
), reported Bloomberg. Earlier, Compuware contacted
Blackstone Group LP, TPG Capital LP and Golden Gate Capital
regarding the proposed sale.
It is noteworthy that Compuware had rejected a $2.3 billion
bid from activist investor Elliott Management Corp. in Jan, 2013,
citing the $11.00 per share offer by Elliot inadequate.
In late January, the company also initiated certain steps to
increase shareholders' value and profitability by stringent cost
controlling measures. Compuware announced a 3-year restructuring
plan that will save $60.0 million. For fiscal 2014, the plan is
expected to save a minimum of $20 million.
Compuware will pay a dividend of 50 cents per share beginning
in the first quarter of fiscal 2014. Additionally, Compuware
announced plans to distribute its remaining shares in Covisint
Corp directly to shareholders after completing the Initial Public
Offering ("IPO") of the 20% Class A stock. The initiatives not
only reflected Compuware's strong balance sheet but also
indicated chances of further restructuring in the form of
headcount reductions and divestitures.
Although a better buyout offer will be positive for investors,
we believe that the prevailing sluggish macroeconomic conditions
will likely to act as an impediment toward fetching a higher
We believe that Compuware's recently announced initiatives are
positive for shareholders over the long term. The company's
product portfolio, which comprises mainframe software,
project-management tools collaboration technology and
performance-management services for cloud computing and mobile
applications are expected to be the growth potentials.
Moreover, its recent better-than-expected third quarter
results reflect continued demand in the APM and Covisint
business, which will boost further growth going forward. We
believe that new program wins and introduction of new products
will help Compuware to counter strong competition from the likes
BMC Software Inc.
International Business Machines
) going forward.
Currently, Compuware has a Zacks Rank #2 (Buy).
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