Compuware rejects management company's takeover proposal

New York-based investment firm wanted to acquire software developer for $11 per share

Published On: Jan 25 2013 10:40:53 AM EST

Detroit-based Compuware said Friday it won't be taking up Elliot Management on its $2.35 billion offer.

The New York-based investment firm had wanted to acquire the software developer for $11 per share.

Elliott currently holds an 8 percent stake in Compuware. It says that while the Detroit-based company has strong assets, its profitability and growth have significantly lagged in recent years.

In a statement, Compuware's Board of Directors said, "Elliott Management Corporation's proposal to acquire all of the outstanding shares of Compuware for $11.00 per share significantly undervalues the company and is not in the best interest of shareholders."

While it will still evaluate any credible offers, Compuware is going to take the following the following actions:

Karmanos stepping down but staying involved

The offer comes about a month after Compuware founder Peter Karmanos Jr. announced plans to step down as executive chairman next year. He stepped down as CEO in 2011.

The 69-year-old is expected to become a consultant for Compuware, earning $600,000 a year. The move to leave the company's board is effective March. 31. Karmanos in 2011 stepped down as Compuware's chief executive.

Karmanos will be succeeded as nonexecutive chairman by Gurminder Bedi, the company's lead independent director.

Karmanos moved Compuware's headquarters in 2002 from suburban Farmington Hills to a new building in downtown Detroit. He had said earlier that he was aiming to retire by 2013, when he turns 70 and the company turns 40.