Compuware CEO Robert Paul said Tuesday that the company's board of directors will wrap up its review this week of a $2.3-billion takeover bid by a New York hedge fund.
Paul made his remarks as the Detroit-based business software firm reported its first quarterly earnings since the Dec. 17 unsolicited offer by Elliott Management. The hedge fund, which owns about 8% of Compuware stock, is known for taking activist positions in what it considers underperforming tech companies.
Paul was upbeat during a late-afternoon conference call with analysts, although he declined to take questions regarding the takeover bid.
"We are gaining momentum in the transformation of our company," he said. "The last few years have been about investment and innovation, and it's beginning to pay off."
Compuware stock closed up 6 cents at $11.06 before the earnings were released after the stock market closed.
The 11-member board said it wouldn't decide on the offer until after the earnings report's release. The hedge fund says its $11-per-share bid is 25% higher than what Compuware's stock was trading for when it initially disclosed the possibility of a takeover.
Compuware reported a modest year-over-year increase in revenues. Total revenues for the quarter ending Dec. 31 were $257.9 million, up $4.8 million from the same quarter a year ago. Net income was $25.3 million, an increase of $3.7 million from the same quarter in 2011.
However, the firm's net income for the first nine months of its current fiscal year is down $14.8 million from levels of a year ago. The company's fiscal year ends March 31.
While Compuware's mainframe services business still produces the majority of its revenue, executives say their higher-growth business products are catching up.
Earnings per share were 12 cents last quarter and 21 cents for the fiscal year to date. Paul said its goal is 36 cents for the full fiscal year.
The CEO has previously called Elliott Management's bid too low.
Peter Karmanos Jr., 69, Compuware co-founder and the previous CEO, has headed the company's board since the 1970s but plans to step down March 31.
The company employed 4,567 employees worldwide last year, including 1,973 at its downtown Detroit headquarters.
A spokesman for Elliott Management had no comment on the earnings numbers.
The hedge fund has accused Compuware's management and board of being slow in reacting to changes in the tech business. It also has pointed out the heavy Detroit-area makeup of the board.
Distributed by MCT Information Services
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