Computer Associates (CA) sent a letter to its shareholders Thursday attacking shareholder Sam Wyly's proxy bid to replace the company's board of directors, and suggesting that his "ill-conceived" plan to overthrow CA's management is little more than a lark.
CA's letter accompanied a mailing of its proxy cards. Shareholders cast their votes by sending in cards supporting either CA's or Wyly's slate of nominees.
In its letter to shareholders, CA quoted a letter Wyly sent to Swiss investor Walter Haefner, CA's largest shareholder.
"It's not that I have a big investment position ... Of course, I'm motivated to increase my wealth, but that's not the only scorecard and there are other ways I can have fun," Wyly wrote. A spokesman for Ranger Governance Ltd., Wyly's vehicle for his proxy bid, confirmed that the quote is accurate, but said it was taken slightly out of context.
"We believe very strongly that Mr. Wyly's ill-conceived plan for CA is a bad idea for CA's shareholders, customers and employees. Don't let him 'HAVE FUN' at your expense," CA wrote, in a letter signed by its chairman, Charles Wang, and chief executive officer, Sanjay Kumar.
"Computer Associates shareholders have certainly not had fun over the last five years, while it appears that Charles Wang and Sanjay Kumar have," responded the Ranger spokesman. "Over that time period, Wang and Kumar were rewarded with almost $1 billion, while shareholders had $100 of their investment dollars turned into $86."
Ranger declined further comment on the contents of CA's letter. In early July, Ranger sent its own letter to CA shareholders, criticizing the software firm for "return(ing) a negative 11 percent for shareholders over the past five years -- versus a positive 171 percent for the software industry."
CA's letter includes testimonials from customers and analysts, along with a list of CA's shareholder-benefiting stock market achievements. It also details what CA sees as the flaws in Wyly's plan to break CA into four independent business units focusing on storage management, security management, systems management, and knowledge management.
Breaking up the company would "hurt customers, increase costs and reduce innovation and synergies," CA wrote. Two-thirds of its customers buy software from multiple product lines and enjoy using "a one-stop shop," CA said. Separating units would also prevent sales representatives from cross-selling products, and drive up administrative expenses, according to CA.
"Sam Wyly's campaign, in our view, is based on self-serving customer satisfaction research and misleading publicity. ... We urge you to ignore and throw away any cards that may be sent to you by Wyly or Ranger Governance," CA wrote.
Ranger has not yet mailed out its own proxy cards. A spokesman declined to comment on when it will do so.
The results of CA's shareholder vote on Wyly's proposal will be announced on Aug. 29 during the company's annual shareholder meeting.