Softbank, CA venture still clicking along
Negotiations between U.S. software maker Computer Associates (CA) and Polish financial software producer Softbank for an internet joint venture are on track despite the replacement of the top official and a shift in strategy at CA, executives from both firms said last week.
CA and Softbank signed a letter of intent on July 18 to form an application-service provider (ASP) joint venture to offer internet access and software sales to businesses in Poland and elsewhere in Central and Eastern Europe.
CA said Charles Wang, the company's founder and chief executive officer, stepped down and was replaced by Sanjay Kumar, CA's chief operating officer. Wang will remain as chairman. CA also said it would reorganize to allow the company to focus on its core businesses and to boost shareholder value, mainly by spinning off some of its technology business.
International news reports cited CA's disappointing earnings and plummeting share price this year for its change of strategy. Last Monday, CA shed its first business its ASP infrastructure creating a firm called iCan-ASP.
But CA's restructuring will not change its plans for the joint venture with Softbank, company officials said. In the two companies' preliminary agreement, CA will receive 51% of the new entity, while Softbank will control 49%.
"There is absolutely no change in our plans," said Robert Fraczek, vice president of Softbank. He said he expected the deal to be finalized in 40 days, but could not discuss details. When asked if the joint venture would become part of CA's ASP spin-off, Fraczek said he did not know and that the issue had not been discussed.
Andrzej Staniszczak, CA's country sales manager for Poland and the Baltic states, said the company's actions had nothing to do with the joint venture and would not affect CA's responsibility for the joint venture in Poland.
While Softbank continues its negotiations with CA, the Polish company plans to launch a financial portal in October. Softbank signed a letter of intent in March with Polish media conglomerate Agora for an internet joint venture, but the two firms cancelled talks on Aug. 4 due to differing visions for the project. Fraczek said two areas of disagreement were the contributions each partner would make and whether the new venture would be an independent company.
Agora's Dorota Nowak declined to comment on the companies' disagreements, but said Agora would start a similar project on its own by the autumn.
