Compuware Corporation's Board of Directors unanimously concluded that Elliott Management Corporation's proposal to acquire all of the outstanding shares of Compuware for $11.00 per share significantly undervalues the company and is not in the best interest of shareholders.

After thorough analysis with its independent financial and legal advisors, the Board also completed its comprehensive review of the company's alternatives and approved an action plan to realize the inherent value of Compuware for its shareholders.

"We are committed to creating value for shareholders and the actions announced today are focused on increasing profitability, building on the momentum of our transition to higher-growth businesses, and returning capital directly to shareholders," said Bob Paul, Chief Executive Officer.

"Compuware has made significant progress positioning APM and Covisint for growth rates between 20% and 30%. We have also stabilized our Mainframe business and realigned our operating structure. Today's actions, including the spin-off of Covisint, will sharpen our focus and reduce costs, delivering greater profitability and meaningful value for shareholders. Our decision to initiate a dividend of $.50 per share is a clear signal that our businesses are strengthening and underscores our confidence in the value that will be created by our actions."

Paul continued: "We believe that selling the company at $11.00 per share does not take into account our progress returning the business to profitable growth and our future prospects. We are confident our plan will accelerate our progress and provide significant, near-term returns as well as future upside to our shareholders. While we are focused on executing and delivering on our plan, the Board will carefully review and evaluate any credible offer it receives, including from Elliott, that delivers full value to its shareholders."

The Compuware actions include:

- Launching a 3-year cost reduction plan that will eliminate at least $60 million in G&A and non-core operational expenses from the company, with a minimum of $20 million realized in FY 2014. The company expects that additional opportunities to rationalize and reduce costs and focus its business will be available as it continues to execute the plan.

- Executing a spin-off of Covisint to Compuware shareholders following the initial public offering, to fully unlock the value of this business. In December, Compuware submitted a registration statement for Covisint Corporation to the US Securities and Exchange Commission for a possible initial public offering of approximately 20% of its Class A common stock. The company expects that within 12 months of completing the IPO it will be distributing the remaining Covisint shares directly to Compuware shareholders, enabling shareholders to participate fully and directly in Covisint's future and favorable prospects.

- Implementing a plan to return capital to shareholders through an annual dividend of $.50 per share, at a yield greater than 4.5% based on Compuware's current stock price, payable quarterly starting next quarter. The dividend is a strong indication of the momentum of the company's strategy, the strength of its balance sheet, and the Board's ongoing commitment to disciplined capital allocation as an important means of delivering value to shareholders.

"We believe the execution of this plan will drive the growth of our key businesses, improve our margins and unlock the substantial value inherent in our company," concluded Paul.

Goldman, Sachs & Co. and Allen & Company are serving as financial advisors, and Skadden, Arps, Slate, Meagher and Flom LLP is serving as legal counsel to Compuware.