NEW YORK — Sandell Asset Management, an investor in Detroit-based Compuware Corp., has sent a letter to Compuware CEO Robert C. Paul criticizing the company’s lack of action on an $11-a-share buyout offer received last month from the New York City hedge firm Elliott Management Corp.

Sandell is threatening a proxy fight for control of the company’s board unless Paul and the board put Compuware up for auction.

In the letter, Sandell CEO Thomas E. Sandell said he had earlier “asked you and the  (Compuware) board of directors to act with more urgency to unlock (the) value” of the company. But, Sandell wrote, “Neither you nor your board seem to have taken our communications seriously. Now you sit silent in the face of an offer from Elliott Management Corp. to purchase Compuware at $11.00 per share cash, which you received over a month ago. As we have stated, we believe that a prompt sale of the company would be an effective path to value realization.”

Sandell wrote that Paul and the Compuware board “have not only ignored our suggestions but also have been intentionally dragging your feet on engaging with Elliott. We believe you should immediately initiate a full auction process for Compuware. We continue to believe that there are numerous financial and strategic parties, in addition to Elliott, that would be interested in Compuware, and that a full auction process would be the most effective way to maximize value. And as part of that process, we believe that you should immediately engage with Elliott, making due diligence materials available to them, in order to elicit from them their highest and best offer. Your inaction is simply unacceptable, and indicates that you and your board are more interested in keeping the status quo rather than taking prompt action to maximize value for shareholders. We believe that this lack of urgency will significantly bolster the case for change to the board composition at the next annual meeting.”

Compuware officials say they are conducting a “careful and thorough review” of the proposal but have offered few details.

But the market may have already made the bid too low. Compuware stock closed Tuesday at $11.01 a share — above Elliott’s offer.

Compuware, established in 1973, offers software that improves the performance of mainframe computers. More recently, it has moved into secure communications services with its Covisint business and software that optimizes the performance of Web applications. Based in downtown Detroit since late 2002, the company now has about 4,500 employees.


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