CSC sues CA for "fraudulent methods" in takeover bid

Computer Sciences has filed suit against its hostile predator Computer Associates, alleging CA used ?unlawful and fraudulent? methods and tried to improperly ?buy? the support of CSC?s chairman Van Honeycutt.

The suit, filed in Los Angeles state court yesterday, is the latest twist in an increasingly nasty saga that started when CA went public on its $9.18 takeover bid for the IT services giant on 11 February, after secret talks fell through.

Computer Sciences claims the bid war has already cost it $50 million in damage to its business and is seeking to recover that money via the lawsuit.

Also included in the allegations are charges that CA executives offered Honeycutt ?commercial bribery? to support an initial offer, of $100 a share, in a meeting on 18 December. The final bid was $108 a share.

The suit claims that CA chairman Charles Wang offered Honeycutt ?more than #50 million? to back the merger, in the form of the personal terms he would receive as part of the acquisition. This would have taken the form of ?guaranteed stock options worth at least $35 million?, reads the allegation, plus a guaranteed seven-year contract wiht a base salary of $2.5 million a year.

The suit goes on to claim that CA executives ?threatened to directly and wrongfully harm Computer Sciences if it refused to agree to a transaction?.

Also, it alleges that CA has been ?improperly? contacting CSC customers and dissuading prospective CSC employees from attending their interviews - which the services company claims violates Californian unfair business practices law.

CA has not responded to the allegations yet. The CSC suit follows one filed by CA in Nevada to remove its would-be partner?s takeover defences.