Paul Singer

Elliott Management Becomes BMC's Largest Owner With 9.6% Stake

Elliott management has increased its stake in BMC Software, Inc. (NASDAQ:BMC) to 9.6 percent, becoming the largest shareholder of the Application Software company. In a SEC form 13D filing dated January 29, the company increased its ownership to 13,692,000 shares of common stock, representing the 9.6 percent stake in the Houston-based software company.

Elliott Management Becomes BMC's Largest Owner With 9.6% Stake

Elliott Management Corporation, based in New York, was founded by Paul Singer in 1977 and is a constituent of two hedge funds, Elliott Associates, L.P and Elliott International Capital Advisors Inc. (EICA). The firm manages more than $20 billion worth of AUM, and has managed a compounded net annual return of ~14.6 percent since inception, compared to S&P 500’s (INDEXSP:.INX) 10.9 percent.

According to  the filing, Elliott International and EICA, partners of Elliott Associates, now beneficially own an aggregate of 8,884,992 shares of Common Stock, which constitute 6.2 percent of all of the outstanding shares of Common Stock. Additionally, Elliott Management individually beneficially owns 4,807,308 shares of Common Stock, which constitute 3.4 percent of all of the outstanding shares of Common Stock.

The filing also noted that Elliott owns 4,806,308 of its shares of Common Stock through The Liverpool Limited Partnership (“Liverpool”), a Bermuda limited partnership, which is a wholly-owned subsidiary of Elliott.

This indicates that collectively, Elliott Management, Elliott International and EICA beneficially own 13,692,000 shares of Common Stock constituting 9.6% of all of the outstanding shares of Common Stock.

Elliott tabled a bid believed to be around $2.3 billion in December in an attempt to counter a possible sale of the company to a rival. Last week, reports indicated that there is a good chance that the deal might go through, eventually. The firm is viewed as an activist against BMC Software, Inc. (NASDAQ:BMC), and its latest move will give it massive muscle to execute its ideas.

Meanwhile, BMC is contemplating selling part or all of itself and is believed to have contacted Bank of America Corp (NYSE:BAC) to midwife the process. Elliott has been breathing under the nose of BMC Software, claiming that the company was badly lagging competitors and had missed business opportunities like software-as-a-service, noted New York Times’ DealBook. The report also notes that Elliott recommended that BMC Software should consider a sale to any of a number of potential buyers, including bigger industry players like Oracle and private equity firms.

BMC Software has a market cap of $5.94 billion with an enterprise value of $6.09 billion. it’s profit margin stands at 14.97 percent while the operating margin is pegged at 21.19 percent.

BMC Software (NASDAQ:BMC) closed at $41.55 per share on Thursday, January 31.


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