I wonde
r how many readers of HotViews (other than me) were involved in the IT sector when Compuware was formed back in 1973? Very few non-corporate IT people even now will have heard of Compuware. Clients for their testing, development, professional services, automation, project and portfolio management and performance management software tend to be mainframe users in the largest corporations. That said, they have c7,000 customers, revenues of c$1b and profits of c$88m.
Yesterday, Elliott Management– ‘an activist hedge fund’ – made a $2.3b offer for the 92% of the shares in Compuware it did not own. A 25% premium to the then current share price.
Compuware rejected the approach (well, for now anyway..) putting forward plans for an uplifted dividend yielding 4.5%, cost cuts etc. It will be interesting to see who else – more likely a trade bidder - now comes out of the woodwork.
I suspect that with a rising stock market, low cost of debt, a low/no growth IT corporate sector, M&A of this type could soar in 2013.
Footnote - It was not until I loaded Compuware's logo that I read the strap line'We make IT rock around the world". Rather than making them seem modern, it immediately reminded me of the 1970s and Status Quo! Old software companies, like old rockers, don't die...they just fade away.