The war of words between Texas financier Sam Wyly and Computer Associates International (CA) continued to escalate this week as Wyly's investment firm, Ranger Governance, filed a lawsuit against CA, and CA responded by accusing him of attempting to mislead shareholders and the media. All this comes less than a month before shareholders decide whether Wyly's hostile attempt to takeover the software company will be successful.
In late June, Wyly and a group of investors launched a proxy shareholder battle to take over Computer Associates and oust its management and board. If Wyly is successful, he plans to split the company into four divisions.
On Monday, Ranger Governance, co-founded by Wyly, filed a countersuit to a lawsuit CA had filed against the company in late June to fight Wyly's takeover attempt. The Ranger suit filed Monday seeks to stop the spread of what Ranger calls false and misleading statements made by CA chairman Charles Wang and company president and Chief Executive Officer Sanjay Kumar in their effort to defeat Wyly's takeover. The suit also seeks to bar CA from soliciting proxy shareholder ballots based upon the statements made by Wang and Kumar.
Additionally, Ranger claims that CA misrepresented the state of the company's relations with its customers; that CA has attempted to cover up illegal disbursement of shares to Wang, Kumar and another executive; that CA omitted background information about one of its nominees from proxy materials sent to shareholders; and that the company has made confusing and misleading statements about its financial performance.
On Wednesday, CA issued a response to Wyly's claims, charging that his complaints rehash old news and are hardly revelatory. Rather, CA said, Wyly is trying to deflect attention from his "vague and misguided plans" for the company.
Computer Associates also addressed Wyly's specific charges. In a release, Kumar said that although there is room for improvement in the company's relationships with its largest customers, there was nothing secret about or withheld from a customer needs study, as Wyly claims. CA also said that it has been entirely proper in its financial dealings.
The company's annual shareholder's meeting is set for Aug. 29, at which time the outcome of Wyly's bid will be announced.