One option Computer Associates is considering to push through its hostile takeover of Computer Sciences is an attempt to remove its board of directors.
This was one tactic oulined by CA chief executive Charles Wang in a letter to shareholders posted on CA's Web site this week. Other moves to push through the takeover include calling for a shareholder referendum and challenging CSC's 'poison pill' measures in court.
The letter goes on to announce three parallel attempts to remove the CSC board and instate new directors who are prepared to let shareholders vote on the bid.
First, CA is asking shareholders for their written consent to remove the existing members of the board and elect new directors.
Second, it is asking for shareholders' signatures on "agent designations" to call a special meeting of shareholders where the members of the Board can be voted out of office.
And finally, CA will also attempt at the next annual meeting - when it is held - to replace all directors. However, this last approach might prove difficult, because the CSC board has given itself the power to delay the annual meeting.
In the letter, Wang also maintains that the $108 per share offer represents "full value" for CSC, referring to the fact that the stock was trading in the low $80s in December. CSC's price was actually over $92 when CA announced its bid - but CA has claimed that the stock's rise in December and January was caused by leaking of information about negotiations between both companies.
The letter also confirms that, in the event of a promptly negotiated transaction, CA is prepared to pay $114 per share.
"Last Wednesday, however, CSC's directors adopted bylaw amendments with the intent of entrenching themselves and disenfranchising you, the owners of CSC", Wang writes.
"They are seeking to make it virtually impossible for shareholders to amend the bylaws or remove a majority of the board by requiring a 90% vote to take these actions. They have attempted to eliminate your right to call a special meeting while, at the same time, granting to themselves a new right to delay the annual meeting without any reason."
Wang also announces in the letter that CA will challenge the recent anti-takeover measures taken by the CSC board in the District Court of Nevada.
The letter goes on to say: "We will continue to press forward with our efforts in court to allow you, the CSC shareholder, as promptly as possible freely to vote your shares and to accept our offer if you choose."
Separately, Wang responded to CSC's accusations that CA had attempted to illegally coerce the services company - and particularly its chief executive Van Honeycutt - to accept the bid. "I am surprised that Van let his advisors drag CSC down to this level of mudslinging," he commented. "Each and every allegation in CSC's complaint is blatantly false, and we will address those claims in court."
The letter marks a new phase in the increasingly messy takeover fight that has escalated since CA went public with its offer to acquire CSC on 11 February. When the CSC board refused to discuss the offer, CA took its bid directly to shareholders on 17 February. The CSC board retorted with a number of measures aimed at making a takeover more difficult and costly for CA. And on Monday, it filed a suit with the Los Angeles County Superior Court, claiming CA had attempted illegal means to coerce CSC to accept the offer, and demanding $50 million in damages.
CA's cash offer to shareholders expires on 16 March.
Cotton seedling freezes to death as Chang'e-4 shuts down for the Moon's 14-day lunar night
Fortnite easily out-earns PUBG, Assassin's Creed Odyssey and Red Dead Redemption 2 in 2018
Meteor showers as a service will be visible for about 100 kilometres in all directions
Saturn's rings only formed in the past 100 million years, suggests analysis of Cassini space probe data
New findings contradict conventional belief that Saturn's rings were formed along with the planet about 4.5 billion years ago