The Deal's off: Corel/Inprise
- — 17 May, 2000 17:27
Despite their separation, the companies remain on good terms and expect to continue partnership opportunities, Corel representatives say. Corel is not charging termination fees, and a plan to realign its cost structure will save the company $US40 million.
Michael Cowpland, president and chief executive of Corel, said he was disappointed that the merger termination would not alter the company's "strategic focus," especially on Linux-related products.
The merger had recently looked to be on shaky ground. Inprise/Borland had requested a review of the transaction terms. Under the original agreement, holders of Inprise/Borland stock would have received 74.7 per cent of a Corel common share for each share of common stock in Inprise/Borland. Corel shares, however, have lost much of their value since the agreement, when they were trading in the $US19 to $20 price range. On Tuesday, Corel shares rose 40 US cents to $US5.81 in midday trading.
A variety of factors weighed on the decision to terminate the merger, Corel executives say.
"There were many factors," Cowpland says. "We're not trying to pinpoint any one factor."
The executives also addressed the company's cash position in wake of a filing last month with the US Securities and Exchange Commission. In it, Corel announced it could run out of cash in 90 days if its merger with Inprise didn't go through.
Executives say that the company has had "many offers" for financing the company and that Corel is in the process of evaluating those offers.
"We have the opportunity to make many other additional partnerships, and we will announce them in the next months," Cowpland said.
