Inprise to investigate ‘fairness’ of Corel takeover
Really concerned - or just trying to wrong-foot suing shareholders?
A sign of cold feet? Inprise today admitted it has asked investment bank Broadview to see whether the terms of its takeover by Corel need to be renegotiated. Inprise describes the review as a "fairness evaluation". Essentially, it wants to ensure its shareholders will get a decent deal when Corel swaps their Inprise shares for its own. The original deal calls for each Inprise share to be exchanged for 0.747 Corel shares. But the dramatic fall in Corel's shareprice since the takeover proposal was accepted by Inprise's board in February means the deal is worth a hell of a lot less than when first struck. Presumably if Broadview concludes the deal is unfair, Inprise and Corel will have to renegotiate. And if Corel's dire pronouncements that it could suffer a cash-flow crisis if the merger doesn't go ahead have anything to them, Inprise will find itself in a much stronger negotiating role. Of course, Inprise is being sued by a gang of shareholders who feel the original deal undervalues their shares, so the Broadview plan could be as much about pacifying them as winning better terms from Corel - just as Corel's cash-flow warning could be simply a manoeuvre to get its own shareholders behind the deal. Broadview will also have to factor in the $29.5 million Inprise will have to pay to Corel if it pulls out of the deal. The bank will report its findings in around two weeks' time. Inprise's moves comes after the company announced a Q1 2000 net loss of $1.1 million ($2.3 million after charges) on revenues of $46.5 million, up from $43.4 million in the same period last year. Q1 1999 saw a net loss of $25.6 million. ® Related Story Corel warns of cash-flow crises if Inprise merger fails