DALLAS (HedgeWorld.com)–Ranger Governance Ltd, part of the hedge fund manager Ranger Capital Group, filed a preliminary proxy statement with the Securities and Exchange Commission on June 27, indicating plans for another effort to take over New York-based Computer Associates International Inc.
Computer Associates’ 2002 annual meeting is scheduled for Aug. 28, with a date of July 3 for shareholders of record. Ranger represents in its proxy that it is the holder, as of that date, of 100 shares of Computer Associates. It is also the owner of options to purchase close to 1.5 million shares, the bulk of which (1.3 million) have an exercise price of $25.08 per share. This is roughly $9 above the current market value of that stock.
Sam Wyly, the Texan who created Ranger Capital and Ranger Governance, is unhappy, in particular, about Computer Associates’ “poison pill,” a by-law that makes any prospective tender offer prohibitively expensive. He contends that during last year’s proxy fight, Computer Associates’ management said it would abandon the poison pill, but it has not done so. Computer Associates has since revised the poison pill in certain respects, but only well short of abolition.
The incumbents won last year’s board election, turning back Mr. Wyly’s last proxy drive, largely due to the loyalty of such institutional shareholders as State Street Bank, and Fidelity Investments, both in Boston (Previous HedgeWorld Story). The campaign seemed to many observers a personal feud between Mr. Wyly and Computer Associates’ Chairman Charles B. Wang.
This year, on March 25, Mr. Wyly sent a letter to the directors of Computer Associates. He asked that its independent directors meet with Ranger officials to discuss the removal of Computer Associates’ management, Chairman Wang, Sanjay Kumar, president and chief executive officer, and Russell M. Artzt, executive vice president. At the same time, Mr. Wyly began contacting shareholders about the possibility of another proxy fight.
On April 25, Computer Associates’ largest shareholder, Walter Haefner, Zurich, Switzerland, said in a letter to Mr. Wyly that he continues to support the current management team. “I believe that despite difficult conditions, they have produced good results… It is also clear that the type of change you suggested is not constructive. In fact, in my view it is hurting both the company and its shareholders.”