ACS Chairman Darwin Deason in a letter to the directors blames them for the botched takeover deal that had Cerebrus buying the operation for about $6 billion, or $62 per share (See Cerebrus Drops Bid for ACS ). Cerebrus cited“poor conditions in the debt financing markets,” for pulling its bid off the table.
Deason, founder of ACS, controls about 42% of ACS shares, according to the Wall Street Journal (he owns about 5%, but maintains about a 40% control over the company via a special supervoting class of stock).
In the letter , Deason says board members Robert B. Holland, III, J. Livingston Kosberg, Dennis McCuistion, Joseph P. O’Neill and Frank A. Rossi have “lost the trust and support of the Company’s shareholders.”
He also charges them with failing to produce any other bidders or superior strategic alternatives, evidenced by the fact that shareholders were never given the opportunity to vote on the Cerebrus offer, according to the letter’.
“The absence of any explanation by the Special Committee as to why it did not permit the shareholders to vote on a deal that met all of the Board’s requirements has exacerbated shareholder frustration,” Deason said in the letter. “The Board’s failure to produce another bidder or superior strategic alternative has called into question the significant time and resources dedicated to the Board’s repeat auction and extensive meetings to consider strategic alternatives,” the letter further stated.
By midday on Thursday, the the independent directors said they intended to resign and will not stand for re-election, but first wanted to ensure their successors are truly independent and capable of protecting the company’s minority shareholders.
They also issued a a retort to Deason, denying allegations that they mishandled the Cerebrus deal, saying they acted “appropriately and in a manner designed to safeguard the best interest of the company and all of its shareholders.” The board members allege that it was Deason who blocked “superior alternatives” to the Cerebrus deal.
The directors say that a Special Committee evaluated the Cerebrus deal in addition to other alternatives. The letter says that the committee agreed to modify the Cerebrus proposal “in a way that would make sense for all the company’s shareholders, including increasing the offer price to a level that could be supported” – an offer that Deason allegedly refused.
The response from the independent board members is here .