Tuesday, December 18, 2012

Billionaire Hedge Fund Manager Bets On Mainframe Computers




Mainframe computers have continued to endure, defying decades of technological change and overcoming predictions of their coming extinction. Now, according to the good folks at Forbes,  a billionaire New York hedge fund manager is making a big bet on big iron computers. Paul Singer’s Elliot Management, a New York hedge fund firm with $20 billion under management, on Monday offered to purchase Compuware, a provider of software and service solutions for the management of mainframe systems. Singer is a hedge fund titan, not a private equity raider, and it’s rare for him to offer to buy an entire company—although not unheard of.

Elliot has been amassing a big stake in Compuware in recent weeks and now owns 8% of the company. Singer’s hedge fund is offering $11 per share in a proposed $2.3 billion leveraged buyout. That offer helped Compuware’s stock increase on Monday by nearly 14% to just under $11. Elliot’s offer is not very firm and contingent on the hedge fund doing due diligence and obtaining “reasonable financing.”


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