Two Texan financiers have initiated a proxy bid to take control of embattled software vendor Computer Associates (CA).
Sam Wyly, former chairman of Sterling Software, which was acquired by CA last year for $4bn in stock, and his brother Charles Wyly said that their investment firm, Ranger Governance, is uniquely qualified to build on CA's products, people and customers.
"CA has unnecessarily conceded key advantages to its competitors and let the best software market in history pass it by. We intend to offer shareholders better management and increased value under the direction of a new and independent board," said Sam Wyly.
A proxy fight is an attempt to persuade the majority of shareholders in a company to vote for a specific proposal. The Wyly brothers are asking shareholders to remove CA's current board and replace it with one that would nominate Sam Wyly as chairman.
Sam Wyly has claimed that the current management's use of accounting ploys, and its excessive compensations for lacklustre performance, has strained its credibility with the financial community.
Last month, CA's shares fell 8.5 per cent in one day following an announcement by the company that it overstated annual earnings by more than 100 per cent, which it blamed on a typographical error.
A statement issued by CA said: "The strategy we have in place, including the product focus areas and the new business model, will yield substantial dividends for our shareholders, customers and employees. In fact, in a recent letter to Mr [Sam] Wyly in response to his proposal, our largest shareholder [Swiss investor Walter Haefner, who owns about 21 per cent of CA's stock] reaffirmed his confidence in the current management team at CA."
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