* Elliott wants new board directors with eye toward sale
* Elliott owns 6.5 pct stake in software company
* BMC resisting Elliott's proposals
By Katya Wachtel
NEW YORK, May 31 Elliott Management, a $20
billion activist hedge fund run by Paul Singer, has stepped up
its assault on BMC Software Inc, repeating calls for the
company to sell itself and appoint new directors.
In a 36-page presentation filed with the Securities and
Exchange Commission on Thursday, Elliott said the software
company's "execution over the past several years has been poor
on numerous fronts, and its growth has been non-existent."
It said BMC faces increasing competition from a host of
other industry players.
BMC shares closed down almost 2 percent on Wednesday and
fell another 2 percent in Thursday morning trading, to $42.07.
The shares are up about 30 percent so far this year.
"BMC's board would be well served to include more directors
with technology backgrounds, especially in today's rapidly
changing marketplace," Elliott said in the presentation, naming
former executives at Hewlett-Packard among its slate of
four nominees to the BMC board.
Elliott presented a list of potential buyers of BMC,
including technology giants such as International Business
Machines Corp, Oracle and Dell, and
private equity firms including KKR, Blackstone Group
and Bain Capital.
The hedge fund firm, founded by the billionaire Singer in
1977, also heaped criticism on BMC's "ineffective" merger and
acquisition strategy, saying the company takes too long to make
acquisitions and pays too much.
Elliott owns 6.5 percent of the common stock of BMC, which
makes software for storage management, database performance and
Elliott has taken similar stakes in other technology
companies, including Novell Inc and Blue Coat Systems Inc, which
resulted in the sale of those companies.
In a letter to BMC's board of directors, also filed with
regulators on Thursday, Elliott portfolio manager Jesse Cohn
said the hedge fund and other shareholders "remain frustrated by
the board's intransigence."
BMC has so far resisted Elliott's proposals for the
Houston-based company to sell itself, and in May it moved to
prevent a hostile takeover by adopting a "poison pill"
Another activist hedge fund run by a former portfolio
manager for the industry's original corporate raider, Carl
Icahn, recently took a 1 percent stake in BMC. Corvex Management
LP bought 1,541,993 shares of BMC, according to a regulatory
filing in May.