NEW YORK (Reuters) - Management software company Compuware Corp has renewed efforts to sell itself, courting not just the buyers of rival BMC Software Inc but also CA Technologies Inc and other buyout firms, several people familiar with the matter said.
Compuware rejected a $2.3 billion offer from New York-based hedge fund Elliott Management Corp in January and asked Goldman Sachs Group Inc and Allen & Company to seek a better offer. Seven months later, no higher bid has emerged.
The company however has held early talks with the private equity consortium that is in process of taking over BMC. Its advisors have also asked CA Technologies, as well as private equity firms that could seek to partner with another company in the software sector, to make indicative offers this month, the people said this week.
It could not be learned whether CA Technologies would respond positively to Compuware’s overtures and pursue a bid.
Compuware shares jumped to a three-month high on the news and ended trading up 2.4 percent at $11.72.
A consortium led by Bain Capital LLC and Golden Gate Capital LLC, which agreed in May to buy BMC for $6.9 billion, is interested in merging it with Compuware but is not likely to start full-fledged negotiations until September, some of the people said.
This is because their takeover of BMC has yet to clear some regulatory hurdles that include a review by Chinese authorities.
Even though these milestones are seen as formalities, Bain and Golden Gate want to take no chances and are currently focused on finalizing the necessary financing and closing the transaction by September, the people said.
However, some preliminary discussions between the BMC’s pending new owners and Compuware have already taken place and have identified as much as $200 million in annual cost savings that BMC could bring to Compuware in a deal done with relatively little new equity, the people added.
Compuware, CA Technologies, Bain, Golden Gate and Goldman Sachs declined to comment while Allen did not immediately respond to a request for comment.
Despite the synergies, negotiations are likely to be tough. The buyout firms acquiring BMC view Compuware’s business as challenging and its offerings in the large computer system segment, referred to as mainframe, not as exciting as BMC‘s, the people said.
It is also uncertain whether Compuware will have any success in finding a willing buyer other than BMC given its previous efforts. Several private equity firms gave up on the company after exploring a possible deal earlier this year, the people said.
In a sign Elliott is willing to facilitate a deal, it extended its standstill agreement with Compuware to September 15. Last month, it agreed to roll some of its shares in BMC into that takeover, offering it visibility on both fronts.
Elliott is a also shareholder in business software company Attachmate Corp, alongside Golden Gate, Thoma Bravo LLC and Francisco Partners LP. The people however said that Attachmate would not participate in any deal with Compuware.
Elliott declined to comment.
Reporting by Nadia Damouni, Greg Roumeliotis and Nicola Leske in New York; editing by Andrew Hay