Feeds

Compuware investor lost patience with shake-up, slams down ultimatum

Find a buyer or come up with some better ideas, stat

Top three mobile application threats

Activist investor Starboard Value has told Compuware it should look for a buyer right now or come up with a new restructuring plan for the firm.

Compuware has been ripe for a takeover since it rejected a $2.3bn offer from its largest shareholder Elliott Management in January, but things have been quiet since it said no to Elliott's bid.

Starboard, which is a five per cent stakeholder in the firm said in a letter to the board that although it appreciated its efforts to turn things around at the company, it felt that restructuring efforts had gone on for too long without coming to any conclusion.

"It has been almost a year since Elliott Management offered to acquire the company for $11.00 per share. While the company has made some progress on its restructuring and value creation initiatives, investors are still left to wonder how Compuware’s long-term strategy will look," Starboard complained.

"Additionally, we believe the length of time that the company has spent exploring strategic alternatives, without any conclusion to the process, has created a significant overhang on the stock price.

"We believe the constant state of flux that has existed for the past year at Compuware is one of the primary reasons that the company’s stock price continues to trade below Elliott’s offer price, despite the positive steps the company has taken to unlock value."

Starboard said that if the company wanted to stay independent, it wanted to see changes to its board and a new restructuring plan for the company, including a $450m share repurchase programme, higher cost cuts, a dividend increase for shareholders and the sale of some assets. The investor wants Compuware to cut $150m from its costs, an extra $50m or so than the current plan calls for.

Rather than any restructuring plan though, Starboard said that it would prefer the company to find itself a buyer.

"A standalone restructuring of Compuware will involve a great deal of execution risk and proper oversight. On the other hand, a sale of the company now at an acceptable premium would immediately deliver value to shareholders and would carry much less execution risk," it said.

Bob Paul, chief exec at Compuware, said in response to the letter that the company had already taken "significant measurable steps" to create shareholder value. In an update to shareholders, Paul said that the company had a number of potential independent director candidates in mind for its board and it was sticking to its existing plan of action for now.

"The current board, along with management, has been successfully executing the transformation process we started earlier this year. We are excited about the opportunities available to Compuware and its shareholders as we pursue our focused plan of action," he added. ®

Application security programs and practises

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Microsoft: We're making ONE TRUE WINDOWS to rule us all
Enterprise, Windows still power firm's shaky money-maker
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.