Elliott makes $2.3bn bid for Compuware Elliott Management, a $20bn hedge fund and activist investor, has made a $2.3bn bid to acquire Compuware, saying the Detroit-based business software maker has underperformed. Elliott, which already owns 8 per cent of Compuware, is offering $11 a share in cash for the remainder of its stock - a 15 per cent premium over its closing price on Friday. In a letter to Compuware's board on Monday, Jesse Cohn, Elliott's portfolio manager, said it believed in the quality of Compuware's assets, "however, its execution, profitability and growth have meaningfully underperformed." As a result of Elliott's significant experience in the software sector and our deep public diligence into Compuware, we believe Elliott is uniquely situated to deliver maximum value to the company's stockholders. He said the New York-based hedge fund, which was founded by the billionaire Paul Singer, was confident it could obtain financing for the deal and it had already had conversations with financing sources. Compuware did not immediately respond to a request for comment. The company makes software for business mainframe computers and also offers cloud software services. Peter Karmanos, who co-founded Compuware in 1973, announced last month he would quit the board, stepping down as executive chairman in March. Elliott revealed it had been building a significant stake in Compuware in a regulatory filing in November. It said in its letter on Monday that its offer represented a 25 per cent premium on the share price before its interest was shown by the filing. In contrast, Compuware's stock had underperformed the Nasdaq and S&P 500 by an average of 6 and 34 percentage points over the last one and two years, respectively, it said. S&P Capital IQ analysts raised their opinion of Compuware from "strong sell" to "hold" on news of the bid. "Although we think Elliott Management may withdraw its offer after discovering that some of [Compuware's] businesses have deteriorated more than expected, we think it is as likely another bidder may appear," they said. Elliott is a large and influential technology investor and has acted as a stalking horse to flush out buyers in the past, teaming up with technology-focused private equity groups. While Elliott said that it was prepared to buy Compuware itself, Mr Cohn told the Financial Times: "Since we filed [our November interest], my phone has lit up with interested parties." Elliott funded the buyout of MSC Software by the Symphony Technology Group in 2009, after initially trying to buy the company itself. The following year a bid by Elliott for Novell ultimately led to that company's sale to Golden Gate Capital for $2.2bn. S&P expects Elliott will sell parts of the company to realise greater shareholder value. Compuware has already begun a process to spin off its Covisint subsidiary, with an initial public offering due in three to six months" time. Compuware shares were 13 per cent higher at $10.80 in midday trading in New York on Monday.