Who’s to blame for Affiliated Computer Services failing to be acquired for $6.2 billion by Cerberus Capital Management and company chairman Darwin Deason? The answer depends on who you ask, and neither side is holding back its true feelings.
Deason today asked five ACS independent directors to resign immediately, saying that the board’s failure to approve the Cerberus offer had caused a loss of shareholder trust. He also said that the board had created customer and employee doubts about the company’s future. Nowhere in his letter does Deason take even a modicum of responsibility for the botched deal, saying:
“Debating the merits of these claims at this point is counter-productive because it would only draw more attention to the existing controversy surrounding the Board. The Board has lost shareholder trust due to its failure to permit the shareholders to vote on the Cerberus offer and its failure to explain its actions and directly respond to shareholder comments to date. The Board must take immediate and decisive action to restore shareholder confidence and resolve customers’ and employees’ doubts regarding the future of the Company. Clearly, changing the membership of the Board is in the shareholders’ best interests, as it will put the existing controversies behind the Company and give the Company a fresh start.”
The directors have agreed to step down for what they claim to be the good of the company, once their replacements can be thoroughly vetted. But they did not take Deason’s claims lying down. Here is a sampling of their reply to Deason, which can be read here in its entirety:
“Your carefully choreographed power play Tuesday evening to coerce the independent directors of ACS into resigning on the spot is consistent with your continuing refusal to understand that the Board’s fiduciary duties are to all shareholders – not just to you. Your ultimatum: resign in one hour or I will go to the press and smear your reputations – was a remarkable piece of bullying and thuggery, and it almost worked…
We could fire you and the entire management team, but that would not help our shareholders, customers or employees. Rather, it would rip the Company apart and cause a lengthy fight and period of uncertainty from which the Company would be unlikely to recover. As a result, we have decided after much discussion among ourselves that the best way for us to discharge our fiduciary duties is to resign in favor of a new majority of independent directors.”