Billionaire bids to take over Computer Associates
1 min read
Texas billionaire Sam Wyly and his brother Charles’ investment company Ranger Governance, are bidding for control of Computer Associates’ board. The pair, who hold $55m in CA stock, have alleged that CA’s existing management is failing its customers and shareholders and failing to perform against competitors – and have published a survey to prove it on the web. CA’s directors have responded with a well orchestrated campaign that insists the brothers’ research is “fundamentally flawed”.
Wyly, who started two companies that have been acquired by CA (University Computing in 1987 and Sterling Software in 2000), wants new people in charge, including himself as chairman, and to divide CA into four separate businesses with four CEOs, all of them heavyweight venture capitalists, entrepreneurs and financial people.
Says Sam Wyly, “Sanjay Kumar [CA president and CEO] has run the company into the ground.”
Analyst Plant-Wide in the US says: “CA has been under scrutiny from accusations from The New York Times that the company uses accounting tricks to inflate and overstate its revenues. When the company released its preliminary financial results for the fourth quarter last month, it confirmed that it had overstated its results due to a typographical error. Although the error was rather insignificant, it did go a long way in weakening investors’ confidence in the company. Wyly alluded to this matter as well, saying it ‘strained its credibility with the financial community.’”
Meanwhile, CA has hit back. Kumar: “Wyly’s assertions are based on fundamentally flawed and self serving research that encompassed 76 interviews, 16 of which have never been customers of ours, and we flatly dispute the survey’s conclusions.” CA says that its researchers, GuideStar Communications, have reviewed the survey and found it “not up to normally accepted standards” and “the margin for error … astronomical.”
Kumar: “We grew to where we are today by focusing intently on the needs of our customers.”
Quite where this leaves manufacturing users in the UK is at the moment unclear. As the story unfolds we will keep you posted.