Ottawa-based software maker Corel Corp. announced its Board of Directors is exploring a welcomed takeover bid from Vector CC Holdings LLC.
Corel is asking Vector for US$1.10 per share for the 22,889,000 Series A shares, which would put the value of the company at over US$90 million.
The potential deal comes on the heels of Microsoft Corp. selling its 20 per cent stake in Corel to Vector CC Holdings, an affiliate of Vector Capital, a venture capital company based out of San Francisco. Corel said it will allow Vector CC to review its books and has hired CIBC World Markets in exploring other strategic alternatives.
The agreement with Vector prohibits the company from making a formal takeover bid at a price lower than US$1.00 per share during the next six months.
Corel is known for product lines including Corel DESIGNER, WordPerfect Office, Draw Graphics Suite and iGrafx.
Vector Capital is a venture capital firm focused on special opportunity investments in software and software-enabled services. It serves the needs of software companies by partnering with their management teams to create new business opportunities.
It was back in October 2000 when Microsoft made a US$135 million or US$5.62 per share offer to Corel, which the firm accepted. In exchange, the Ottawa outfit agreed to help Microsoft develop products for its .Net platform. Corel spokesperson Anne Vis on Tuesday said that when Vector Capital announced it would buy Microsoft’s shares, it also indicated that it expected to have discussions “with Corel’s senior managers and Board of Directors about various strategic alternatives,” and so pursuing a takeover was not a surprise.
Vector signed a non-disclosure agreement and has 30 days to conduct its due diligence review of the company.
Corel is online at www.corel.com.