UPADTE 3-Hedge fund takes offer for Epicor to shareholders
(Adds comments from Epicor, analysts)
BANGALORE, Oct 15 (Reuters) - Hedge fund Elliott Associates LP on Wednesday took its $529 million cash offer for Epicor Software Corp (EPIC.O) directly to shareholders, two days after it was snubbed by the business software maker's board.
Elliott launched a tender offer through a unit for Epicor shares at $9.50 per share, about 40 percent premium to the stock's closing price Tuesday, and a 20 percent premium at the time of its Oct. 1 offer to the company.
Elliott and its affiliates own about 10.2 percent in stock and $28.7 million in convertible notes of Epicor.
"We don't believe (Epicor's) management, which owns less than 6 percent of outstanding shares, has the ability to block the offer," Mark Schappel of Benchmark Co LLC said in a note.
Epicor shares rose as much as 14 percent in morning trade but gave up most of the gains and were trading up 20 cents at $7.00 in afternoon trade on Nasdaq.
"We would not be surprised to see shareholders accept Elliott's offer," analyst Peter Goldmacher of Cowen & Co said by phone.
In a statement, Epicor said its board was reviewing the offer and advised shareholders to defer taking action.
NO RIVAL BID
Neither analyst expects a white knight to come forth with a rival bid arguing that it would have already come up if any company had planned to do so.
Schappel said the most likely suitor for Epicor, if at all, would be Oracle (ORCL.O), followed by Lawson Software Inc (LWSN.O), Microsoft (MSFT.O), SAP (SAPG.DE) and privately held Infor.
"We don't think that Elliott is necessarily committed to acquiring the business and operating it," said Schappel, who has a "hold" rating on the company.
He said the strategy of taking the company private to "clean up" its operations, injecting new management and liquidating it later would be challenging.
"They are trying to put it (Epicor) in play to get a higher bid but they are (also) prepared to pay," said Goldmacher, who upgraded the stock to "neutral" from "underperform."
Earlier this year, Elliott offered to buy Packeteer Inc, but the company was bought by Blue Coat Systems Inc (BCSI.O) for a price higher than Elliott's original offer. Continued...
