Computer Associates' chairman Charles Wang admitted in a press interview today that he might be forced to drop his hostile takeover bid for Computer Sciences, if he fails to win a reversal of CSC's 'poison pill' measures.
"I like to win, but I'm not going to kill myself to win," he was quoted as saying, the first sign that he is weakening in his determination to buy the services company at all costs.
Meanwhile, Computer Sciences has painted a rosy picture of its financial prospects, in an attempt to convince its shareholders that the hostile takeover bid from Computer Associates does not represent fair value.
When CSC advised its shareholders on Monday not to accept the $9.8 billion bid, CEO Van Honeycutt promised to deliver financial details that would support his case. On Wednesday, the company filed forward looking statements with the Securites and Exchange Commission (SEC).
CSC said that, for its fiscal year that ends on 3 April, it expects to report $6.58 billion revenue and $843 million in net earnings. It said earnings per share are expected to be $3.41.
The services company also revealed its preliminary budget for 1999 and its forecast for 2000. The company is expecting a growth in revenue to $7.83 billion in 1999 and $9.31 billion in 2000, with earnings per share growing to $4.12 and $5.55.
"We have won or implemented $6.7 billion in large outsourcing contracts over the past 12 months, and our new business development pipeline is full," said vice president and CFO Leon Level in a statement. "We have a high level of confidence that we will win a significant percentage of the opportunities we are currently seeking."
Van Honeycutt said in a statement: "We are also seeing considerable internal growth in our vertical business groups and in such areas as Year 2000 services, enterprise-wide solutions and electronic commerce. The visibility of such strong growth has the potential to effect significant appreciation in our stock price and underscores the inadequacy of the CA offer, particularly when compared with valuation multiples found in the marketplace generally and in other takeover transactions."
CA is seeking the reversal of CSCs antitakeover measures before the District Court of Nevada. A hearing has been set for 16 March.
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