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Newsday, November 17, 2009 article


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November 17, 2009 By JAMES BERNSTEIN


CA takeover protection

Is CA Inc., the giant Islandia-based software company, afraid of a hostile takeover? The company says no, but its board has decided to renew a poison pill, or a Stockholder Protection Plan. Such plans make it more difficult for an unwanted takeover to occur.

The board of CA, formerly called Computer Associates, announced the plan to replace the company's existing poison pill, which expires Nov. 30. The new plan to take effect Dec. 1 is for three years.

"The new rights plan was not adopted in response to any specific effort to acquire control of the company and is not intended to prevent a takeover at a full and fair price," CA said in a statement.

But Gary Lutin, who runs a shareholder forum on CA, has another view.

"Let's face it," Lutin said. "The company's not performing well, and the CEO is leaving. This is called being in play."

In October, CA said second-quarter revenues fell 3 percent, to $1.07 billion, the result of "revenue decline across all of its business and geographic segments, except North America."

John Swainson, CA's 55-year-old chief executive, said in September he will retire, effective Dec. 31, after five years at the helm.

CA's stock has been trading at around $18, down from a high of about $23 in October.

"Implementing a poison pill at this stage would give the board more control" of any attempted takeover, said Lutin.


Copyright 2009 Newsday. All rights reserved.




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