CA Technologies put out a seemingly mundane press release late Friday announcing a new addition to the CA Board of Directors. The new board member is Jens Alder, the former CEO of Swisscom (OTCPK:SCMWY) and a Swiss citizen. The largest shareholder of CA also happens to be Swiss.
Walter Haefner is a Swiss billionaire, who sold his company to CA in 1987 and now holds approximately 25% of the shares. There is an additional link between Haefner and Alder other than their citizenship. In 2004, Walter Haefner invested alongside Swisscom, a company run by Alder at the time. It would not be unreasonable to assume that Jens Alder is on the CA board because of Mr. Haefner.
In 2001 Walter Haefner stood by CA management when it faced a proxy battle from an activist shareholder. Why, after nearly 25 years, is CA's largest shareholder looking for representation on the board?
In late July at an investor conference, CA management announced it was no longer making large acquisitions. This was a break from its previously stated strategy of making a few acquisitions a year. The abrupt change in strategy, combined with the new addition to the board, leads me to believe that CA must be feeling pressure from an activist shareholder.
A decade ago, CA was the third largest independent software company in the world behind Oracle (NYSE:ORCL) and Microsoft (NASDAQ:MSFT).The company has woefully underperformed since. My best guess is that CA's largest shareholder is fed up, as most would be after nearly 25 years.
Disclosure: I am long CA.