Hedge Fund Vet Talks Singer's Qlik Involvement

Enterprise software firm Qlik Technologies Inc QLIK has been targeted by veteran hedge fund manager Paul Singer's Elliott Management Corp. and the activist investor may push for a sale of the company.

According to a regulatory filing last week, Elliott Management has bought 8.88 percent of Qlik's total outstanding common shares for about $200 million.

Elliott said Qlik shares are significantly undervalued. Elliott believes that Qlik operates in a highly strategic area of the technology industry with an attractive competitive position and a compelling product set, the value of which is not reflected in the Issuers current market value.

"The Reporting Persons believe there are strategic and operational opportunities for the Issuer that would meaningfully increase value to shareholders and have initiated a dialogue with the Issuers Management and Board of Directors (the "Board") regarding those opportunities," the filing said.

The development was enough for the shares Qlik shares to jump 12 percent to reach a high of $27.05 on March 4. This was an increase of 71 percent from Qlik's 52-week low of $15.77 in February.

Pennsylvania-based Qlik operates in the business intelligence market, which BMO Capital Markets' Keith Bachman expects to grow by about 5 percent in each of the next two years. The BI and related security markets are expected to be prioritized over other areas in IT spending budgets.

Related Link: BMO On Software: Starts Splunk At Outperform, Tableau, Qlik At Market Perform

Qlik Technologies provides user-driven business intelligence solutions that enable customers to make business decisions. The company's QlikView solution enables business users to explore data; ask and answer their own stream of questions; and follow their own path to insight on their own, or collaborate across teams and organizations.

Singer may push Qlik for sale to giants such as International Business Machines Corp. IBM or Oracle Corporation ORCL as they also have similar products.

"Qlik "is like a lot of other tech firms run by engineers," who build great products, sell them fast, but had a tough time squeezing higher profits after sales grew past a few hundred million dollars a year, Philly.com reported citing a veteran hedge-fund officer.

Singer's recent tech targets included business software maker EMC which agreed to combine with Dell in a $67 billion deal, while Citrix Systems, Inc. CTXS had agreed to replace its CEO and board. Informatica acquired by European private equity firm Permira Advisers and the Canada Pension Plan Investment Board (CPPIB) for approximately $5.3 billion. Other companies include Compuware Corp, Riverbed Technology Inc. and Blue Coat Systems Inc, who were ultimately snapped up by private equity firms.

Shares of Qlik were down 18 percent this year.