Corel, Adobe deny takeover rumours
- — 12 February, 1999 21:49
Corel said today its board of directors has adopted a shareholder rights plan to be used in the event of a takeover attempt, although earlier today a spokeswoman squashed rumours that Adobe Systems was planning a hostile takeover bid for Corel.
The shareholder rights plan would provide Corel's board and shareholders with sufficient time to evaluate any takeover bid and explore alternatives that "maximise shareholder value," as well as ensure that all shareholders are treated equally, the company said in a statement. It is not intended to deter takeover bids, the company added.
The plan will not become effective until regulatory approval is granted. A previous shareholder rights plan was approved in July 1998 but has lapsed. The board plans to submit the new plan at the firm's annual shareholders meeting, which is expected to be held April 14, Corel said. More than half of the shareholders must approve for it to be adopted.
Earlier today Corel spokeswoman Catherine Hughes said the company had not been contacted by Adobe and did not have any knowledge of plans by Adobe to acquire Corel. "This is the third or fourth time in the past year that we've heard similar reports," she said, declining to comment further.
Hughes and other Corel officials could not immediately be reached to discuss the shareholder rights plan.
Adobe spokeswoman Wendy Strickman denied the rumours in a Dow Jones report yesterday, saying there was "absolutely no truth" to them. Strickman did not return a call seeking comment on the reports.
The latest speculation surfaced in an article in Toronto's Globe and Mail that cited unnamed sources last week saying Corel had met with takeover-defense specialists to discuss how to fend off an expected bid from Adobe. Corel believed Adobe was planning such a bid based on research gathered by Canadian investment-fund players, the article said.
Last month Corel announced its first profitable quarter in two years and its first profitable year in three years. The company also announced it was selling off its Corel Computer NetWinder division, which makes Linux-based thin client/thin server computers.