Compuware Corp., the Detroit-based software company that also owns a suite of health IT products, has received a buyout offer of $11 per share—a $2.3 billion bid—from activist investor Elliott Management Corp.
Compuware subsidiary Covisint offers technology to support health information exchange, data sharing and analysis within accountable care organizations and identity management, among other tools. On Friday, Compuware announced that Covisint had submitted a draft registration statement with the U.S. Securities and Exchange Commission for a possible initial public offering
of common stock.
Compuware disclosed Elliott's buyout offer in a stock exchange filing. Elliott already owns 8% of Compuware, making it one of its largest shareholders, according to a letter the hedge fund sent to the company's board of directors.
Elliott first started building its position in the company Nov. 26; this move was disclosed in a Schedule 13D filing
. The offer letter states that the takeover proposal represents a 25% premium over the company's stock price when the 13D was filed.
"Compuware is a long-established company that we have followed closely for several years," the letter states. "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."
Modern Healthcare sister publication Crain's Detroit Business
reported Wednesday that Compuware had hired a broker to buy back slightly more than $150 million worth of the company's outstanding common stock.