Elliott Is Said to Take Stake in Software Firm Micro Focus

(Bloomberg) -- Elliott Management Corp., the New York hedge fund run by billionaire Paul Singer, has built a position in Micro Focus International Plc and plans to push for changes at the U.K. software company, according to people familiar with the matter.

The size of Elliott’s holding and the changes it would be seeking aren’t clear, the people said, declining to be identified as the issue is confidential.

Private equity firms could be interested in all or parts of Micro Focus and some buyout firms have crunched the numbers and spoken to banks about the feasibility of a deal, the people said. No formal talks between the company and potential buyers are underway, they said.

Representatives for Elliott and Micro Focus declined to comment.

Shares rose as much as 19 percent Thursday and closed up 7.6 percent at $12.59 in London.

Its stock fell the most in 13 years last month after the Newbury, England-based company warned that its year-over-year revenue decline would be greater than expected and said its Chief Executive Officer Chris Hsu had stepped down.

The sales warning stemmed from complications integrating the acquisition of about $8.8 billion of software assets from Hewlett Packard Enterprise Co., the company said. Micro Focus said it expected the hit to be mostly a one-time effect from the combination of the businesses rather than any underlying issues. That news followed a January revenue warning.

Elliott has a long history of agitating for sales of companies in the technology space. Last month it disclosed a stake in travel technology company Travelport Worldwide Ltd. and is pushing the company to explore strategic alternatives, people familiar with the matter said at the time. Elliott may also be interested in acquiring Travelport through its private equity arm, they said.

Qlik Technologies Inc., Informatica Corp. and Mentor Graphics Corp. were all also targeted by Elliott before being sold.

--With assistance from Sarah Syed Ruth David Kiel Porter and Manuel Baigorri

To contact the reporters on this story: Ed Hammond in New York at ehammond12@bloomberg.net, Scott Deveau in New York at sdeveau2@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Chitra Somayaji

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