CSC board rejects CA's hostile bid

In a letter sent today to shareholders, CSC (CSC) urged rejection of CA's (CA) hostile $108-per-share offer because it "does not represent fair value to our company."

In a filing with the Securities and Exchange Commission, CSC said it is pursuing third-party talks and other alternatives, such as issuing stock or incurring funded debt, as a way to fight off CA's bid.

However, analysts have been skeptical of CSC's ability to find a so-called "white knight" that would help the El Segundo, Calif., computer services company fight off CA. Instead, they have suggested that CSC acquire another firm, thus enlarging itself as a defensive move.

The takeover bid turned hostile last month when CA, of Islandia, N.Y., lowered its offer from $114 to $108 per share. The battle has since became increasingly nasty, with CSC filing suit against CA and CA firing off a letter to CSC's shareholders and its board calling the suit "mudslinging."

The suit accuses CA officials of committing fraud in their bid to acquire CSC, specifically by attempting to buy off CSC officials.

CSC's board has taken other steps to fight the takeover, including amending the company's bylaws and taking other measures designed to make a merger extremely difficult.