Michaels Chairman Steps Down to Fight for Computer Associates

Texas billionaire Sam Wyly said Friday that he has stepped down as chairman of arts and crafts chain Michaels Stores Inc. to devote more time to his fight for control of software maker Computer Associates International Inc. and his family’s hedge fund business.

Wyly plans to devote more time to meeting with his investors and carrying on his campaign to take control of the board of Computer Associates, the world’s No. 4 software company, and oust founder and Chairman Charles Wang and Chief Executive and President Sanjay Kumar.

“That’s the highest priority I’ve got,” Wyly said. Wyly has said he also will turn more of his attention to Ranger Capital, his family’s hedge fund business.

Wyly’s older brother, Charles, has been named Michaels chairman. Sam Wyly will retain his seat on the board and serve as vice chairman.

Last month, Wyly said he would wage a proxy fight and ask shareholders to vote to replace the software maker’s current board with a slate he had chosen. Under the plan, the new board would name Wyly chairman and oust Wang and Kumar.

Shareholders are scheduled to choose a board of directors at the company’s annual meeting Aug. 29.

“We’re hearing good feedback,” Wyly said. “But none of us are going to know until election day. There’s nothing either side can tell you until election day.”

A representative for Islandia, N.Y.-based Computer Associates said the company would not comment on Wyly’s latest move.

Since declaring war, Wyly, who founded two companies later sold to Computer Associates, has attacked Wang and Kumar, accusing them of fostering a corporate culture that mistreats both customers and employees.

He said Computer Associates’ leaders have allowed the stock to languish and called the company’s controversial new accounting method an example of “games and gimmicks.”

To support his charges against Wang and Kumar, Wyly often has cited the stock’s five-year performance, during which it lost 14% of its value.

Since Jan. 1, however, Computer Associates shares have climbed 79%, closing down 14 cents at $34.76 on the New York Stock Exchange on Friday. Computer Associates shares have outperformed the S&P; computer and software index by 66% since the start of the year.

This week, Computer Associates broke from the pack and reported quarterly earnings far above analysts’ expectations and revenue in line with forecasts.