The year ahead is shaping up to be a pivotal one for mid-market ERP provider Epicor Software. Recent developments indicate that Epicor will be battling not only a moribund economy that has rattled it and other software providers, but also a dauntless private equity firm that appears determined to tuck Epicor into its portfolio of companies.
Since terminating its unwelcome buyout offer of $7.50 per share on Nov. 21, hedge fund Elliott Associates has taken its offensive to the open market. Over the past few weeks, the firm and its subsidiary, Elliott International, have quietly purchased more than 340,000 shares of Epicor at prices ranging from $3.31 in late November to $4.75 earlier this week. With those trades, Elliott now owns more than 6 million shares of Epicor common stock.
Epicor’s own representatives have been active as well. On Nov. 24 and 25, Chairman George Klaus purchased 100,000 shares at prices ranging from $3.10 to $3.50, bringing his tally of common stock to more than 2.4 million shares. James Richardson and Michael Kelly, both members of Epicor’s board of directors, each purchased 10,000 shares of company stock on Nov. 21 for approximately $3 a share, bringing Richardson’s total to 30,000 and Kelly’s to 48,594.
The total number of Epicor shares outstanding is approximately 60 million.
Elliott’s run on Epicor common stock could signal that the investment firm is looking to shore up its voting power. In earlier reporting, a source close to the takeover battle told Managing Automation that Elliott Associates may mount a proxy fight to take over Epicor by electing Elliott-friendly directors to the board.
In an October SEC filing amending its bylaws, Epicor detailed the nomination period for board directors.
“If a stockholder intends to submit a proposal or nomination for director for the 2009 Annual Meeting of Stockholders that is not to be included in Epicor’s Proxy Statement and form of Proxy relating to the meeting, the stockholder must give Epicor notice … between February 7, 2009 and March 9, 2009, except as otherwise provided in the Bylaws.”
An Epicor spokesman today declined to comment on the recent stock purchases.