Darwin Deason, the babe-toting, multimillionaire boss of Affiliated Computer Services, yesterday booted five of the company’s independent board members after blaming them for the failure of a $6.2 billion, management-led takeover by hedge fund Cerberus Capital Management.
Seven months after making its offer, Cerberus withdrew the bid earlier this week, citing the weak credit markets. Several large ACS shareholders had also called on the board to approve the $62-per-share deal.
Deason claims the directors dragged their feet and damaged shareholders by not finalizing a deal before the credit markets turned sour.
The directors claim that Deason asked for their resignations at a heated board meeting Tuesday night and threatened to send out a scathing press release if they didn’t approve the Cerberus deal immediately.
“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,” the directors responded in a letter yesterday.
Instead of firing Deason, the board members said they felt compelled to resign because they could no longer fulfill their fiduciary duties to the company’s shareholders.
They claim Deason impeded efforts by the board to search for other buyers after Cerberus made its offer public back in March.
As part of a Cerberus takeover, Deason, who controls about 40 percent of the voting power of ACS, stood to receive at least $250 million in change-of-control payments, according to sources close to the situation.
Sources said ACS, a computer outsourcing company, received superior takeover proposals from smaller technology rival Unisys a few months after the Cerberus deal was made public and also had gotten overtures from Computer Sciences Corp.
“From the outset, you have attempted to subvert the process in order to prevent superior alternatives to your proposal from being consummated,” the directors said in the letter.
“I have never seen nor heard of such a resignation en masse,” said Wayne State University law professor Steven Davidoff. “If these facts are true, Darwin’s conduct here is not only egregious but likely a breach of his fiduciary duty of loyalty to the company.”
Deason, 67, who is known for his fondness of Kahlua and Diet Coke and for making appearances with a bevy of young women on each arm, was once accused of threatening to kill the chef aboard his 118-foot luxury yacht.