In reaction to Compuware Corp.'s (CPWR) poor preliminary the fourth-quarter fiscal year 2013 earnings, Sandell Asset Management said, in a letter to Compuware's CEO and Board of Directors, that the real reason for the poor fourth-quarter performance was management's inability to execute operationally. Sandell Asset Management also said it believed that the only viable path to maximize stockholder value, rather than destroy it, is to execute a sale of the company to the highest bidder as promptly as possible.
Previously, Compuware cited various reasons for the poor fourth-quarter performance, including a weaker IT spending environment, delayed purchasing decisions by European clients and various "challenges and distractions".
Sandell Asset Management noted that Compuware may have rebuffed a serious bidder, based on the company's inflated view of the company's standalone value. Sandell again urged the company to conduct a full and robust auction and consummate a sale at the best available price as soon as possible.
Earlier this year, Compuware rejected an $11.00 per share buyout offer from hedge fund Elliot Management, saying it "significantly undervalues" the company.
"Should you fail to promptly take steps to maximize stockholder value, which we believe can best (if not only) be accomplished through a robust auction process for sale of the company, we intend to pursue a change to the Board composition at the next annual meeting," Sandell Asset said in the letter today.
On 3rd April, Compuware warned that its fourth quarter results would come in way below analysts' current consensus estimates, due to delays in closing a large number of deals. Accordingly, the company also lowered its fiscal year 2013 revenue and earnings outlook.
On Wednesday, the company said it expects revenue of $237 million to $241 million and adjusted earnings of $0.05 to $0.06 per share for its fourth quarter ended March 31, 2013. For the fiscal year 2013, the company said it expects revenue of $942 million to $946 million and adjusted earnings of $0.26 and $0.28 per share.
In October, the company said it expected fiscal 2013 revenues of $980 million to $995 million and adjusted earnings of $0.36 to $0.40 per share.
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