CSC offers $14m to fend off CA

Computer Sciences (CSC) has fired the latest shot in its ongoing battle to prevent Computer Associates (CA) from succeeding in its hostile takeover bid.

In an unusual move, the services company has offered its investment bankers a $14 million bonus if they successfully thwart the CA bid.

In other developments, CSC filed a lawsuit claiming CA had committed 'commercial bribery' by trying to persuade CEO Van Honeycutt to accept its offer. CA responded with a personal attack on Honeycutt, saying he had raised the issue of personal compensation. CA chief executive Charles Wang also accused CSC of an 'almost racist attitude' for probing his company's links with Chinese investors.

Most recently, Wang appealed directly to Computer Sciences' investors and accused its board of interfering with shareholders' rights in its attempts to block the bid. CSC has a poison pill in place which allows it to issue new shares, effectively diluting a bidder's offer. Removing the pill requires a shareholders meeting, which the services company has delayed until 1999 by amending company by-laws. CSC also increased, from 50 to 90 per cent, the proportion of votes required to remove a director from the board.

Independent analyst Richard Holway was critical: 'In UK law you wouldn't find a company doing this kind of thing. The shareholders should be allowed to make the decision for themselves.'