Robert Young at the conclusion of his keynote at the Linux Business Conference at Comdex took a few questions. One attendee asked Mr. Young about his feelings with respect to Corel's Linux initiative, and the competition it brings to the Linux arena. He looked down for a few moments in contemplation--deciding how best to answer the question. In the end, he said that he supports Corel's efforts because it advances the acceptance and use of Linux, which is good for Redhat.
However, Mr. Young totally danced around the "competition" aspect of the question.
Mr. Young spoke on Monday, and Dr. Cowpland delivered the keynote on Tuesday. In his presentation, Dr. Cowpland displayed many differences between Redhat and Corel, in terms of revenue, total engineers, overall capability, and market cap. Dr. Cowpland's presentation clearly pointed out the strength of Corel's overall position.
I'm sure Redhat could not ignore the activity surrounding Corel's desktop at Comdex. One wonders if Dr. Cowpland and Mr. Young held an informal get-together at Comdex to discuss possibilites.
Logically, acquiring a "windows like" desktop for Linux is an obvious extension of Redhat's efforts. Not only that, Corel's powerful productivity and graphic's applications would extend Redhat's reach into the overall business market fast and in a big way.
Problems. First, Corel's stock is rapidly rising making a buyout more costly to Redhat.
Second, if Dr. Cowpland and the Board refused to sell, I doubt that the Linux community would respond well to a hostile takeover. If Redhat is considering any advance to Corel, it must do so on friendly terms.
Third, with Corel's turnaround complete and now operating in performance mode, I doubt that shareholder's would accept anything less than a premium price from Redhat.
Conclusion? Corel is firmly in the driver's seat if there is to be any merger. Although RHAT has the strength of it's market cap, there are limits to what it can do in the current environment of the rise in CORL. If there are any merger talks under way, Mr. Young would need Dr. Cowpland's complete cooperation and teamwork. And maybe he has it???
All JMHO, of course.
Further Up,
Scott |
