RE: Important day for the future of CorelThe market is ready to move higher. Looks like all Vector wants to do
is hold Corel down.....
Vector, Corel remain mum on possible
deal
By Leo Valiquette, Ottawa Business Journal Staff
Mon, May 5, 2003 3:00 PM EST
No announcement expected. That was the message from Corel Corp. on
Monday as a second deadline drifted by for potential suitor Vector Capital.
Corel spokeswoman Ann Vis said no announcement was expected either
Monday or Tuesday.
Monday marked the end of the 12-day extension that Corel granted the San
Francisco-based venture capital firm late last month. The extension followed an
initial 30-day period in which Vector began the process of due diligence to
decide if and when it would pursue a takeover of Corel.
Vis pointed out Monday that Vector is not required by the terms of the
standstill agreement signed in March to take any action by any particular
deadline in the due diligence process. The deadlines are simply meant to limit
how long Vector has access to sensitive company information.
When the first 30-day period expired on April 22, Vector co-founder and
managing partner Alex Slusky said his firm remains interested in Corel. It
simply needed more time to pick through the books of the Ottawa software
maker to make an informed decision.
Corel chairman James Baillie has already said the board of directors would
accept a takeover offer from Vector unless a better bid emerges.
Corel has retained CIBC World Markets as an advisor to help it pursue its
"strategic alternatives."
The company has said it will accept any rival bid that either pays a five per
cent premium over whatever Vector may offer, or amounts to at least US$1.25 a
share.
No rival bidders have as yet emerged.
Late last week a class action complaint was filed against Corel by an
unidentified shareholder. The suit claims Corel and its directors breached their
responsibilities to maximize shareholder value by signing the standstill
agreement with Vector.
The suit seeks an unspecified amount of compensation, as well as an
injunction against the process.
Corel has denied the validity of the suit and said it plans to vigourously
defend itself.
The due diligence process began on March 24 when Corel and Vector signed
the standstill agreement that formalized the venture capital firm's interest in an
acquisition.
The agreement initiated a process in which Corel was obligated to shop around
for other suitors in order to ensure the best possible return for its
shareholders.
Vector became a major shareholder in Corel earlier in March after buying
Microsoft Corp.'s block of preferred Corel shares. These shares are convertible
into common shares that would represent a 20 per cent stake in Corel.
Corel would accept any offer from Vector worth at least US$1.10 a share.
Vector has also agreed not to pursue any takeover of the company within the
next six months worth less than US$1 a share.
When the process began, Vector said it was not yet willing to offer as much as
US$1.10. It has yet to set a price that it is willing to pay.
Vector has said that if it were to acquire Corel, it would take the company
private.