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Investment group fights to gain control of CA

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CIOL Bureau
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Ilaina Jonas

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NEW YORK: A Dallas-based investment group, Ranger Governance Ltd., said on

Thursday that it had initiated moves to gain control of Computer Associates

International Inc., one of the world's biggest software makers.

The group, lead by entrepreneurs Sam and Charles Wyly, said in addition to

nominating a slate of replacements for the current Computer Associates board, it

proposes to divide the Islandia, New York-based software company into four

divisions, which might eventually be spun off into separate businesses.

Sam Wyly, the former chairman of Dallas-based Sterling Software Inc., which

was acquired by Computer Associates for $4 billion in stock last year, said he

has agreed to serve as chairman of the board if selected by a slate of nominees.

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"I have team of people we can put together," Wyly told Reuters,

"good workers within CA now and other people we can bring aboard that can

get that company to grow. The company's not growing. The values are not growing

and they're mistreating their employees. They're abusing their customers."

Computer Associates defended its practices.

"We remain committed to enhancing value for all of our

shareholders," the company statement said. "The strategy that we have

in place, including the product focus areas and the new business model will

yield substantial dividends for our shareholders, customers, and employees. We

are confident that we have the support of our principal shareholders. In fact,

in a recent letter to Wyly in response to his proposal, our largest shareholder

reaffirmed his confidence in the current management team of CA."

Ranger Governance Ltd., which consists of Wyly and his family, has a $55

million-stake in Computer Associates, or less than 1 per cent. He said the

company's stock price had crashed 11 per cent over the past five years. Shares

of Computer Associates rose $1, or nearly 3 percent, in early morning trading

Thursday on the New York Stock Exchange, while the Dow Jones Industrial average

was off by 9 points or 0.09 percent

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Ranger Governance said it would try to persuade the company's shareholders to

approve the board candidates at Computer Associates' annual meeting, which is

set for Aug. 29. As part of the group's proposed plan of restructuring, the

business would be reorganized into four independent business groups - storage

management, security management, systems management and knowledge management -

and recruit leadership for each segment from within the existing management.

Each group would have its own chief executive who would not sit on the board,

Wyly said. Once established, the board would determine, whether these separate

business segments could be spun off or divested to create additional shareholder

value, the group said.

"Simply stated, Computer Associates has unnecessarily conceded key

advantages to its competitors and let the best software market in history pass

it by," Wyly said earlier in a statement. "Computer Associates could

be a great company, but only with a new independent Board and a new top

management team."

(C) Reuters Limited 2001.

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