Investment and Hurdle Rates
TELETECH CORPORATION, 1996
Raiders Dials Teletech
Wake-up Call Needed Says Investor
New York (AP)---The reclusive billionaire Victor Yossarian has acquired a 10 percent stake in Teletech Corporation and has demanded two seats on the firm’s board of directors. The purchase was revealed yesterday in a filing with the Securities and Exchange
Commission, and separately in a letter to Teletech’s CEO, Maxwell
Harper. “The firm is misusing its resources and not earning an adequate return,” the letter said, “The company should abandon its misguided entry into comput-ers, and sell the Product and
Systems Segment. Management must focus on creating value for shareholders.” Teletech issued a brief statement emphasizing the virtues of a link between com-puter technology and telecommunications. TELETECH CORPORATION, 1996
Margaret Weston, Teletech’s chief financial officer, learned of
Yossarian’s letter late one eveing in early January 1996. Quickly she organized a team of lawyers and finance staff to assess the threat. Maxwell Haper, the firm’s CEO, scheduled a teleconference meeting of the firm’s board of directors the next afternoon. Harper and Weston agreed that before the meeting they needed to fash-ion a response to Yossarian’s assertions about the firms’s returns. Ironically, returns had been the sub-ject of debate within the firm’s circle of senior managers in recent months. A num-ber of issues had been raised about the hur-dle rate used by the company in evaluating performance, and in setting the annual capital budget. Since the company was ex-pected to invest nearly $2 billion in capital Wall Street Daily News, January 9, 1996 projects in 1996, gaining closure and consensus on these issues had become an important
Raiders Dials Teletech
Wake-up Call Needed Says Investor
New York (AP)---The reclusive billionaire Victor Yossarian has acquired a 10 percent stake in Teletech Corporation and has demanded two seats on the firm’s board of directors. The purchase was revealed yesterday in a filing with the Securities and Exchange
Commission, and separately in a letter to Teletech’s CEO, Maxwell
Harper. “The firm is misusing its resources and not earning an adequate return,” the letter said, “The company should abandon its misguided entry into comput-ers, and sell the Product and
Systems Segment. Management must focus on creating value for shareholders.” Teletech issued a brief statement emphasizing the virtues of a link between com-puter technology and telecommunications. TELETECH CORPORATION, 1996
Margaret Weston, Teletech’s chief financial officer, learned of
Yossarian’s letter late one eveing in early January 1996. Quickly she organized a team of lawyers and finance staff to assess the threat. Maxwell Haper, the firm’s CEO, scheduled a teleconference meeting of the firm’s board of directors the next afternoon. Harper and Weston agreed that before the meeting they needed to fash-ion a response to Yossarian’s assertions about the firms’s returns. Ironically, returns had been the sub-ject of debate within the firm’s circle of senior managers in recent months. A num-ber of issues had been raised about the hur-dle rate used by the company in evaluating performance, and in setting the annual capital budget. Since the company was ex-pected to invest nearly $2 billion in capital Wall Street Daily News, January 9, 1996 projects in 1996, gaining closure and consensus on these issues had become an important