Computer Associates

(CA) - Get CA, Inc. Report

, the software company that was recently thrust into the spotlight because of questions about its

accounting practices, now has another headache -- Texas billionaire Sam Wyly.

Wyly, one of the founders of Dallas-based investment firm

Ranger Governance

, isn't exactly happy with CA's current management. To prove it, last month he launched a bid to gain control of the company's board. The move could prove deadly for the current management team in the unlikely event he succeeds. Market experts aren't giving him much of a chance, but at least one analyst believes the company might institute some changes to get Wyly, who owns less than 1% of CA's stock, out of the picture.

He has been stepping up the pressure lately, running newspaper ads bashing the company's executives and telling shareholders that "liberation day" is coming soon. He said that surveys conducted with CA's customers show how unhappy they are with the company's services. Wyly has promised to double the company's stock price within three years if shareholders vote for his cause, and he claimed to have as much support as the current board has during a sample of about 10 institutional investors.

Now, Computer Associates has sued Wyly, alleging that he violated a noncompete clause he signed when he sold

Sterling Software

to CA for $4 billion last year.

"The claim in the lawsuit is bogus. I'm not competing with CA," Wyly said on a conference call Friday. "I'm competing with

Computer Associates Chairman Charles Wang. This lawsuit is a smokescreen. We're not intimidated by it. We're in this fight to the end."

In a June interview on

CNN's

"Moneyline," Wyly railed against the company's management. "They have had horrible performance, and these three top managers have written themselves stock of a billion dollars while this so-called independent board has just sat by meekly and done whatever Wang told them to do," Wyly said. "This is awful, this is bad stuff, and it's got to change."

The company may be getting used to playing defense. On July 3, 2000, right before midnight, Computer Associates issued a statement warning that its revenue and earnings would badly miss analysts' expectations, a move that came while many market watchers and investors were either asleep or on vacation for a four-day holiday weekend. When the market opened on Wednesday, July 5, CA's shares lost more than 40% of their value in a single trading session. Less than four months later, Computer Associates introduced a new revenue recognition policy designed to increase the predictability of its financial results. Then came the questions about CA's accounting. Needless to say, the company's executives aren't showing much patience for Wyly's complaints.

"Wyly's assertions are based on fundamentally flawed and self-serving research that encompassed 76 interviews -- 16 of which were with individuals who have never been customers of ours -- and we flatly dispute the survey's conclusions," Sanjay Kumar, the company's chief executive and president, said in a statement. CA said that "the questions were formulated in a manner to provoke negative responses." Computer Associates also said that, according to data the company compiled, 93.4% of its customers consider CA software "important" to "mission-critical" to the successful operation of their business.

And analysts say that while Wyly may talk a good game, he probably won't succeed in sacking CA's board. In many proxy issues, shareholders don't even vote. Those who do often follow the recommendations of the company's management. In Computer Associates' case, the company could already count on about 31% of the shareholder votes. Wyly needs more than 50% of the votes to gain control of the board. CA insiders own about 10% of the company's common shares, and Swiss billionaire Walter Haefner, who owns about 21% of the stock, said he would support the current management. In order to gain control, Wyly must sway more than 70% of the remaining shareholders to get one-half of the votes.

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"It's hard to handicap it, but I don't think it will happen," Peter Goldmacher, an analyst with

Merrill Lynch

, said of Wyly's chances of succeeding. The analyst didn't seem terribly impressed by Wyly's data, and he said that in addition to having Haefner's support, mutual fund issuer

Fidelity

, which also has a stake in the company, will likely side with Wang and Kumar. "Fidelity built their position knowing who the current management is," Goldmacher said.

Wyly has dealt with Computer Associates for years, usually on friendlier terms. Before he sold Sterling Software to the Islandia, N.Y., company for about $4 billion in stock and warrants last March, he sold

Uccel

, formerly

University Computing

, to CA in an $840 million deal in 1987. He said he was taking his case to shareholders with the claim that customers are unhappy with Computer Associates, a statement the company obviously denies.

Goldmacher said he was surprised when he heard of the bid to unseat the current board, but he views the Wyly saga as more of a public relations setback than anything. Computer Associates has a shareholders' meeting Aug. 29.

"I think CA is undergoing changes as we speak," the analyst said. "They're trying to enhance products, they are undergoing changes. But I think what people have to understand is why. Their core market is shrinking and when that happens company dynamics change and you become susceptible to things like board takeovers."

Shares of CA were off 98 cents, or 2.7%, to $35.02 in recent

New York Stock Exchange

activity. The 52-week high is $52.43, and the low for the last year is $18.12.

But at least one analyst said Wyly's action could spur Computer Associates' management to make some changes. T.K. MacKay, a securities analyst at

Morningstar

, said the bid to replace the board could prompt management to deal with the corporate culture problems that have plagued the company and hurt its reputation.

"There's a chance that it could go through, but I think it would be pretty earth-shattering if Wyly could convince investors," MacKay said. "At the very least, it's going to ruffle some feathers and get things done a little quicker over there."