this is a done dealJason, you got that right. This is looking real good.
I'm going to post something that Tlimrassaf brought our attention to
a couple of weeks ago because it was so important and look at the NR
RSC had a few days ago with relation to Corel XML and you can see
why Vector wants this company.
Community: Corel/Vector Takeover
Open Letter from Director of Center of
Open Source & Government
Mar 25, 2003, 21 :00 UTC (10 Talkback[s])
(3144 reads)
(Other stories by Tony Stanco)
Yesterday, with the market down 307 points in
one of its worst days in months and with an IT
slump the worst in decades, Corel shares rose
27%, because Vector Capital launched a takeover
bid. Why with all the bleak news in the IT industry
is there a takeover bid for a company commonly
regarded as comatose, owning supposedly
dead-end products, and until recently trading at its
cash value of $75 million?
Because Corel has hidden value of between $500
million and $1 billion.
Corel, unlike any other company, has the potential
to be the Open Source XML standard for
e-Government, e-Commerce, and e-Health.
I made a presentation to that effect last week in
Washington, D.C. at the Center of Open Source
& Governments 2nd Open Source in Government
conference [www.egovos.org]. There I explained
the strategic value of Corel to over 100 conference
participants, including senior government IT
officials from the U.S., European Commission,
Canada, Korean, Mexico, Japan, and France.
Also, all the major vendors were present at the
conference, including Microsoft.
The main benefits of Corel are:
1.WordPerfect remains the only real
competitor to the Microsoft Word platform
hegemony, with important hold-outs using it
in the legal industry and in some government
agencies around the world. This at a time
when governments and companies are
seriously looking for alternatives to
Microsoft products.
2.Corel has embarked on a major XML
initiative. If XML open standards take hold
as many in government and industry hope,
Corel has the potential to benefit in a very
significant way as the world moves to a
Web services computing platform.
3.Most significantly, Dell and HP have
recently begun to pre-install Corels
products on their PCs as a result of the
Microsoft antitrust settlement.
The stakes for the technology industry are high,
because while Corel can gain up to $1 billion in
stock price in the next couple of years, that would
come mostly at the cost of Microsoft losing up to
$100 billion in market value as it sees a significant
portion of its applications revenue evaporate. This
would compound the problems Microsoft is having
with Open Source Linux on the operating system
side, and could fundamentally cause the
displacement of it as the leader in the software
industry, with better placed companies, like
Oracle, taking the leadership role moving forward to an Internet-centric world.
In conclusion, Corel has the potential to leverage the gaining Open Source
momentum like no other company and can position itself as a major IT player either
alone or with strategic partners. Therefore, Corel has significant hidden value for its
shareholders or a strategic acquirer in a rapidly changing IT landscape.
Yours truly,
Tony Stanco
Tony Stanco is the founding director of the Washington-based Center of Open
Source & Government, and is associate director of the Cyber Security Policy
and Research Institute at The George Washington University. Before this, he
followed Corel for almost 6 years as a senior securities attorney in
Corporation Finances Internet and Software group at the U.S. Securities and
Exchange Commission. Mr. Stanco neither has nor intends to have any stock
ownership in Corel. The opinions expressed are his own.