(Adds private equity background, details from sources)
By Nadia Damouni
NEW YORK, April 11 Business technology maker BMC
Software Inc is expected to receive final takeover bids
on April 22, with potential buyers pared down to two private
equity groups, four people close to the matter said on Thursday.
Shares of BMC rose 1.7 percent to $45.50 on Nasdaq, valuing
the Houston, Texas-based company at about $6.5 billion.
Buyout firm Thoma Bravo has joined a bidding group led by
KKR & Co LP and TPG Capital LP, while Bain Capital LLC
and Golden Gate Capital remain teamed up for the auction, the
The private equity firms are finalizing financing for their
respective bids, said the sources, who asked not to be named
because the talks are private.
BMC could receive final bids ranging from the mid- to upper
$40s per share, one of the sources said.
Buoyant debt markets have encouraged private equity to
consider larger deals which in turn call for larger equity
checks and make buyout firms more open to teaming up.
In the most striking example this year, Blackstone Group LP
, KKR, Carlyle Group LP and Singapore's state
investor Temasek Holdings joined forces to submit an $11.1
billion offer for genetic testing equipment maker Life
Technologies Corp, people familiar with the matter told
Reuters this week.
The private equity firms looking at BMC are coming up
against a couple of challenges, including a recent rally in its
stock as well as options around the company's two different
businesses: mainframe and enterprise service management
businesses, one of the sources said.
BMC, which competes with Oracle Corp, SAP AG
, CA Inc and Compuware Corp, was under
pressure from Paul Singer's activist hedge fund Elliott
Management to sell itself last year.
Elliott Management, which owns a 9.6 percent stake in BMC,
had signed a standstill agreement with BMC last summer that
ended on April 6. The New York-based hedge fund now has the
ability to bid for BMC or nominate directors to its board.
KKR, TPG, Golden Gate, Bain, Thoma Bravo and Elliott
declined to comment. BMC did not respond to requests for
(Reporting by Nadia Damouni; additional reporting by Soyoung
Kim and Greg Roumeliotis; Editing by Gerald E. McCormick and