Monday, May 14, 2012

BMC Software (Nasdaq: BMC) rebuffs Elliott with poison pill

BMC Software (Nasdaq: BMC) rebuffs Elliott with poison pillAtlanta, GA 5/14/12 (StreetBeat) -- BMC Software Inc (Nasdsaq: BMC) adopted a shareholder rights plan to help stave off a potential acquisition, after hedge fund group Elliott called for a sale of the company and told the business software maker it acquired a more than 5 percent stake.

Elliott Associates LP and Elliott International LP, which together hold the stake, plan to nominate a five-member slate to its board, BMC said on Monday.

New York-based Elliott, an activist hedge fund, often urges companies to sell themselves and sometimes starts proxy fights to elect its own representative to the board.

BMC - which makes software for storage management, database performance and data recovery - adopted a poison pill with a 10 percent trigger, giving one right to each outstanding share and will expire on May 11, 2013, unless renewed.

Shares of BMC Software, which have lost nearly a quarter of their value in the past year, were up 4 percent at $41.96 in premarket trading. They closed at $40.40 on Friday on the Nasdaq.

Dodge & Cox, Columbia Management Investment Advisers LLC, Vanguard Group Inc and BlackRock Institutional Trust Co also hold at least 5 percent each in BMC.

BMC's board rejected Elliott's proposal to sell the company and said it was not in the best interest of the stockholders, the company said in a statement on Monday.

Morgan Stanley is the financial adviser and Wachtell, Lipton, Rosen & Katz is the legal counsel to BMC.

BMC, which offers software and cloud platforms that help businesses cut costs by allocating resources better, is valued at $6.5 billion.

Last week it posted a 21 percent increase in revenue from professional services, and its bookings in cloud-related licensing rose.

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