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CSC board to discuss bid
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February 26, 1998: 4:29 p.m. ET
Directors will 'possibly take action' on CA's $9.8B hostile takeover offer
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NEW YORK (CNNfn) - Computer Sciences Corp.'s public misgivings over a hostile takeover bid by Computer Associates International Inc. will get a boardroom airing Friday when CSC's directors meet to discuss the offer.
In a statement from its El Segundo, Calif., Headquarters, CSC (CSC) said it would not make a formal recommendation on the bid to its shareholders until board members had met to consider and "possibly take action" on the offer.
CSC (CSC) shares closed down 1 at 102-1/2 while CA (CA) stock ended up 7/16 at 45-7/8 in Thursday trading on the New York Stock Exchange.
CSC and Computer Associates (CA) have been locked in an increasingly rancorous sparring match since earlier this month when CA went public with an offer to acquire the company for $114 per share. When CA rebuffed the bid, CSC struck back on Feb. 17 with a $108-a-share bid that would value its takeover target at $9.8 billion dollars.
Islandia, NY-based CA, which specializes in making computer operating systems used by large companies, cited the potentially higher costs of mounting a hostile takeover campaign in justifying the lower per-share price.
Since then, the volleys of mutual recrimination have grown in volume. In a forceful letter to his CA counterpart, Charles Wang, last week, CSC Chairman Van Honeycutt urged him to rescind the takeover offer, arguing that it would damage CSC's credit rating and lead to employee defections and a stream of customer cancellations.
Honeycutt said in the letter that he believed CA's offer serious underrated the value of his company.
Wang retaliated Wednesday with a written appeal to CSC shareholders in which he blasted CSC's plan to change its by-laws to make it more difficult for shareholders to call for a quick vote on the acquisition.
In the run-up to Friday's meeting of directors, CSC on Thursday filed notice of the proposed tender offer with the Securities and Exchange Commission. The company said it would amend the filing by March 2 to include its recommendation to shareholders.
CSC posted revenues of $6.3 billion for the 12 months ended Dec. 26, 1997. The company employs 44,000 people in 600 offices worldwide.
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