The board of directors at Irvine business software maker Epicor Software Corp. on Tuesday rejected for the second time a buyout offer by New York hedge fund Elliott Associates LP.
The board “unanimously determined that Elliott Associates LP’s offer is not in the best interests of Epicor and its stockholders,” the company said in a statement.
On Oct. 1 Elliott sent an unsolicited letter to Epicor’s board that said it was prepared to pay $9.50 a share for Epicor, 20% more than what the company’s stock was trading at before the offer.
Elliott owns 10.2% of Epicor, making its offer for the rest of the company’s shares worth about $510 million. It also owns $28.7 million in debt that converts to Epicor stock.
A few weeks after the initial buyout offer, Epicor’s board rejected the deal.
Chief Executive Tom Kelly cited market instability and said the company is focused on the rollout of its newest software suite, Epicor 9, and wouldn’t entertain the offer.
After the deal was rejected, Elliott said it planned to take its offer directly to shareholders in a bid to get around the board.
Epicor asked shareholders not to make a move until it further reviewed the offer.
This time around, the board found the deal “highly conditional, opportunistic and would deprive stockholders from benefiting from the value associated with Epicor’s current and planned business software solutions,” Kelly said in a statement.
The company listed a slew of arguments as to why it wouldn’t bite.
It said the offer is “significantly below historical averages of Epicor’s stock price” and cited “unprecedented market volatility and dislocation” at the time it was made.
It also questioned Elliott’s ability to pay and said the offer is “disruptive to the company’s business, customers and key employees,” among other complaints.
Epicor makes enterprise resource planning software that helps midsize companies manage accounting, customer contacts, inventory, sales and other tasks. It also makes software for retailers.
Its shares are off about 35% in the past year.
