Jill Vardy on the Merger Denial:
Corel denies rumors it is a takeover target
By JILL VARDY
Technology Reporter The Financial Post
OTTAWA - Corel Corp.'s denial yesterday that it's being eyed as a takeover candidate managed to dampened a marked rise
in the company's stock.
Corel shares (COS/TSE) closed the day down 15› to $3.60. But they are still well above the $2.48 at which they closed last
Friday. In New York, shares (COSFF/Nasdaq) closed at US$2 3/8, down 5/32.
At one point, officials from the Toronto Stock Exchange phoned the company to find out what was going on and were told
the company wasn't aware of any significant changes. Internet chat groups, meanwhile, were rife with rumors of a possible
takeover by IBM Corp.
If that's happening, it's news to Corel chief executive Michael Cowpland. He denied yesterday the company is talking to IBM
or other potential suitors.
"No, none at all," he said. "We've got a very good game plan in place here and we think it's unfolding the way it should."
Cowpland said his company has not sought outside help to find a buyer. He said while investors should "watch this space" for
announcements in the months to come, this week's stock rise had more to do with old news.
First, there was the announcement Monday of an alliance with speech-recognition company Dragon Systems Inc. to
voice-enable future versions of Corel WordPerfect's legal edition.
"This has caused a tremendous buzz," Cowpland said. "People are very excited about it."
Heavy trading volumes in the U.S. suggest an article in Monday's New York Times has also revived interest in Corel. Despite
the fact the article was decidedly neutral, the stock jumped 40› that day in Toronto.
Technology analyst Duncan Stewart of Tera Capital Corp. said the 50% increase in the share price was probably the result of
short-sellers driving up the stock.
Stewart predicted that, given very little change in the fundamentals of the company, Corel's shares will slide down over the
next week. |
