Monday, May 14, 2012

BMC Staves Off Hostile Takeover

Houston-based BMC Software, the developer of IT management software, is looking to stave off what looks like a hostile takeover of the company this morning. BMC said today that it has been informed that hedge fund Elliott Associates and its affiliate Elliott International, L.P., have acquired a beneficial ownership of more than 5 percent of the firm's common stock, and also said it has adopted a "shareholder rights" plan in response. Elliott is a well known investor which attempts to force companies to sell themselves, and which has already said it plans to nominate its own five member slate to BMC's board of directors to force the software company to pursue a sale of the company. BMC said in a statement that "We do not believe the Elliott proposal is in the best interests of our stockholders.” Shareholders rights plans are commonly known as a "poison pill" to make it harder for companies to be taken over by hostile acquirers.