Crescendo Investments II, LLC

August 29, 2005 13:25 ET

Crescendo Mails Letter To Geac Computer Corporation Limited's Shareholders

NEW YORK, NEW YORK--(CCNMatthews - Aug. 29, 2005) - Crescendo Investments II, LLC ("Crescendo Investments") on behalf of Crescendo Partners II, L.P., Series F ("Crescendo Partners"), announced today that it is mailing the following letter to shareholders of Geac Computer Corporation Limited ("Geac") in connection with Geac's upcoming Annual General Meeting scheduled to be held on September 13, 2005:

August 29, 2005

Dear Fellow Shareholder:

Crescendo Partners II, Series F is the owner of approximately 5.01% of the shares of Geac Computer Corporation Limited. We invested in Geac for the same reason you did, because we believe that the shares are undervalued. Geac has been accumulating a substantial cash position over the last three years and we are very concerned that Geac is under pressure to use this cash to overpay for a large acquisition. We also would like the Company to take more active steps to increase the value of the shares. We are therefore asking for your vote to allow our two nominees to represent you on the Geac board.

We Seek a Shareholder Voice, Not Control

We are asking you to elect our two nominees to an eight-member board. If successful, we would be a minority presence, but a presence with a strong voice - your voice - at the table. Independent representation is necessary, in our opinion, to prevent Geac from entering into an overpriced acquisition transaction that could destroy shareholder value for all. Geac's balance sheet shows approximately US$183 million in net cash sitting in Company coffers. When combined with Geac's recently acquired US$150 million line of credit, this cash position allows the board to make a significant and potentially "transformational" acquisition without any prior shareholder approval. If elected to Geac's board, our nominees intend to seek to have Geac's cash used to create shareholder value, and not to overpay for a large acquisition.

Our concerns are fueled by Geac management's recent statements indicating their need to make an acquisition and their justification to pay a high price. They said, "This strong cash position contributes significantly to Geac's flexibility to execute a transformational acquisition..." Yet, they also said, "We do not see transaction prices getting cheaper," and improved sales "may enable us to expand the justifiable horizons upon which we might value acquisitions." The Company must realize that it will not be able to justify keeping such a large cash position much longer. We are therefore concerned that pressure is building to make a large acquisition in this very expensive software acquisition market. As you consider your vote at this critical meeting, we urge you to keep in mind not only the almost US$330 million in available cash, but also the misguided 1999 acquisition of JBA Holdings which almost bankrupted the Company. Despite the Company's optimism regarding this acquisition, Geac's stock price declined from over C$30 per share to nearly C$2 per share in the following two years. Even now, six years after this ill-fated transaction, Geac's stock price has only recovered to one-third of its price.

Geac is Undervalued - Let's Work to Fix It

You likely share our belief and our frustration that Geac shares, although having risen substantially in value over the past several years, are still undervalued. We believe there are a number of value-creating strategic alternatives available to the Company, which should be fully explored. As directors on Geac's board, we will work to have Geac retain an investment bank to fully and carefully examine and evaluate all strategic options open to it. Recently, Geac announced it had retained Bear, Stearns & Co. in late 2004 to help grow the Company. We believe that the focus of Bear, Stearns' mandate is to find an acquisition for Geac. The mandate for an investment bank hired by Geac should not be to focus only on acquisitions, but to actively explore ALL options, a very important distinction. Courses of action that might be considered would include:

- a normal course issuer bid that is actually executed;

- a substantial issuer bid;

- a return of capital;

- a regular quarterly dividend;

- the sale of the Company in whole or in parts; or

- the transformation of all or some portion of Geac into an income trust.

The most important issue now is not whether the stock has done well over the last several years, but rather where Geac goes from here. In this time of high-priced acquisitions of software companies, is it better for Geac to be a buyer at high prices and to assume substantial risk, or is it better to explore being a seller or other share maximizing strategies for which we would expect to realize a substantial premium for all shareholders?

Crescendo's Nominees

Crescendo is asking you to vote for its two nominees - Eric Rosenfeld and Dennis J. Conroy. Mr. Rosenfeld is the President and CEO of Crescendo Partners, the owner of over 5% of Geac's outstanding shares. He is an investment professional and currently serves on the boards of 4 public companies - two of which are listed on the Toronto Stock Exchange. Mr. Conroy has been a management consultant to the telecommunications and information technology business for most of his career, and most recently served as a Managing Director of BearingPoint, Inc., one of the world's largest business consulting and systems integration firms.

Our current investment in Geac is worth over US$40 million. Wouldn't you prefer to have representatives on the board who have a significant financial stake in the Company and therefore be totally aligned with your interests?

Both nominees would represent your interests as a shareholder on the Geac board. Having been independently elected, both nominees would have a strong voice advocating unbiased interests.

The Company has questioned why, in our proxy circular, we truncated the Company's share performance graph at the end of April 2004. The reason we did not use the share performance graph from the Company's own 2005 proxy statement is because there was a significant mistake in that graph. Geac erroneously stated that the S&P/TSX Composite Index was down by more than 60 percent from 2000 to 2001 while in fact; it was only down about 14 percent. This mistake gave the impression that the performance of Geac was in line with the performance of the Index over the 2000 to 2005 period. This was wrong. The performance of the Company's shares significantly lagged the Index by over fifty percent during the considered time period. Geac's information in its own 2005 proxy circular is wrong and misleading. That is why we used the graph from their 2004 proxy circular. Interestingly, after we pointed out this mistake to Geac shareholders, the Company corrected its proxy circular.

Your Vote - Your Voice - Your Opportunity

Shareholders of a public company do not often have the opportunity to elect directors that were not nominated by the sitting board or management of a company. We are convinced that both the risks and the promise we see in Geac are real, and have therefore gone to considerable effort and expense to put our nominees before you.

We urge you to take this opportunity to put an independent shareholder voice in the boardroom. Please sign, date and return the enclosed GOLD proxy today following the instructions provided thereon. Proxies must be received by us no later than September 8th if we are to have time to properly present them at the meeting. If you have already sent in a proxy to Geac management, you have every right to change your vote by signing, dating and returning a later dated GOLD proxy.

Vote to Protect your Interests. Vote the GOLD Proxy Today.

Thank you for your support,


Eric Rosenfeld

On behalf of Crescendo Partners II, L.P., Series F

If you have any questions, or need assistance voting your GOLD proxy, please call our proxy solicitors, Innisfree M&A Incorporated, toll-free at 1-877-825-8772 (English Speakers), or 1-877-825-8777 (French Speakers).

Crescendo Partners' proxy circular is available through the SEDAR website at

Cautionary Note Regarding Forward Looking Statements:

This press release contains forward-looking statements of Crescendo Investments' intentions, beliefs, expectations and predictions for the future. These forward-looking statements often include use of the future tense with words such as "will," "may," "intends," "anticipates," "expects" and similar conditional or forward-looking words and phrases. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected. Investors are cautioned not to place undue reliance on these forward-looking statements. Crescendo Investments undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.

Contact Information

  • Crescendo Partners:
    Eric Rosenfeld
    President, Chief Executive Officer and
    Managing Member of Crescendo Investments
    (212) 319-7676
    Innisfree M&A Incorporated:
    Alan Miller
    Co-Chairman, Managing Director
    (212) 750-5831