Texan billionaire seeks to oust CA's board

Don't write him off

  • alert
  • submit to reddit

The Power of One eBook: Top reasons to choose HP BladeSystem

Texas, the spiritual home of the cowboy, used to be known for big hat wearing, baked bean eating, bull riders. Nowadays though there's a new image coming out of this western state. The bulls are still there of course, but this time they don't come in Rodeos, this year they come in bullishness. And this year they aren't taking any prisoners.

In much the same way as Dubya Bush resolves situations by applying the death penalty, one of his supporters is calling for a very similar axe to fall on the heads of Computer Associates. His gripe is that CA just isn't innovating. His resolution is to install himself as the chairman.

Sam Wyly, a billionaire Texan, has this week launched a proxy bid to take over the helm of CA. If successful he is planning to split CA into four operating units and return investor value to the firm. He claims that, 'By any performance measure - stock price, financial growth or customer satisfaction - Computer Associates has clearly under performed against its peer companies.'

Wyly, if truth be told, could have something of a valid point. In many ways CA could look better by being restructured along its technology lines. And, you could argue, that CA's pro-forma invoicing, which has resulted in a bout of bad press recently, does make the firm somewhat unnacountable for a couple of years - because previous results will be incomparable to current results. You could also argue that he has some claim to the company, having sold Sterling Software to CA for $4 billion recently.

However, Wyly's campaign, you could argue, reeks of opportunism and personal politics - with adverts in the New York Times criticising CA's management team for smiling. Further to that, he looks to be milking a run of bad press that CA has suffered recently and is using this as grounds for his instatement as chairman.

CA, as you might imagine, is keeping pretty tight-lipped about the whole affair. It has said that it wholeheartedly disagrees with Wyly and that its stock has risen 72 per cent over the past six months.

Further to that, the firm has had the backing of one of its biggest shareholders, a Swiss investor called Walter Haefner who owns 21 per cent of the firm. He has written to Wyly stating that he is confident in the ability of CA's management team. Fidelity Investments, another major shareholder, is so far said to have kept quiet.

Wyly, in a typically bullish fashion, says that CA should allow all of its shareholders to vote on his proposal. But, presumably, CA's argument is why should they listen to Wyly? CA has consistently done exactly what is says it is going to do - in terms of revenues, growth and overall performance - and bad press doesn't mean that will change.

Further to that, CA's management team, which consists of founders Charles Wang and Sanjay Kumar amongst others, has already created one of the world most successful software companies. Wyly, on the other hand, hasn't.

But, you can't write him off. He is undoubtedly a successful entrepreneur and a force to be reckoned with. That doesn't mean that he is the man to return investor value to the company of course. But it does mean that, with the annual general meeting of shareholders approaching, CA could have an interesting battle on its hands.

© IT-Analysis.com. All Rights Reserved

Reducing security risks from open source software

More from The Register

next story
NO MORE ALL CAPS and other pleasures of Visual Studio 14
Unpicking a packed preview that breaks down ASP.NET
Cheer up, Nokia fans. It can start making mobes again in 18 months
The real winner of the Nokia sale is *drumroll* ... Nokia
Mozilla fixes CRITICAL security holes in Firefox, urges v31 upgrade
Misc memory hazards 'could be exploited' - and guess what, one's a Javascript vuln
Put down that Oracle database patch: It could cost $23,000 per CPU
On-by-default INMEMORY tech a boon for developers ... as long as they can afford it
Google shows off new Chrome OS look
Athena springs full-grown from Chromium project's head
Apple: We'll unleash OS X Yosemite beta on the MASSES on 24 July
Starting today, regular fanbois will be guinea pigs, it tells Reg
HIDDEN packet sniffer spy tech in MILLIONS of iPhones, iPads – expert
Don't panic though – Apple's backdoor is not wide open to all, guru tells us
prev story


Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.