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Technology Stocks : INPR - Inprise to Borland (BORL) -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Nicks who wrote (4715)	3/10/2000 7:18:00 AM
From: Magic212	Respond to of 5102

From Merrill research out this morning on Corel Corp. by analysts Alex Baluta and Malcolm White they do not rate the stock either short or long term. (this is page 2. The summary page does not transfer over well from the PDF file without lots of editing..) Summary Analyst Meeting Focused on Projected Forward Synergies Between Corel and Inprise/Borland. On March 8th, Corel hosted an analyst meeting and its AGM, both of which were well attended. The analyst meeting focused on what management of Inprise/Borland (INPR; Not Rated) and Corel see as the objectives they can reach, and potential synergies that they can achieve, through their proposed merger. Dominating the Linux space is not their primary objective. The real idea is that the combined entity will be positioned as a cross-platform software vendor enabling application access and integration over the Net. Conceptually, Inprise represents the back end (the plumbing) while Corel represents generic front-end productivity applications (the fixtures) that almost everyone will want to access. Inprise/Borland's development products (Delphi, Kylix) provide the "tools" to be used in the construction of these end-to-end enterprise solutions. We expect, and management appeared to agree, that the combined entity will turn its focus away from its traditional Windows roots (where both have little competitive advantage) towards open standards (Linux, Corba) opportunities that are not likely to be dominated by Microsoft. Forward-looking architectural objectives of both companies address two needs: the ability to access legacy systems information over multiple platforms and the emerging market for ASP-hosted applications. Here, Inprise/Borland will lever its Visigenic's background and Corel will use its applications suite and thin client cross-platform capabilities from GraphON (GOJO; Not Rated). In our opinion, this is a crowded field and, despite the opportunities could prove both distracting and challenging for the combined companies. Both management teams, despite current market noise, remain optimistic that the merger will conclude successfully in May. We are at the preliminary stage of this merger and both companies have yet to file all of the necessary SEC/merger documentation. Benefits of Merger are Clear; Synergies Less So in our view. We do not see this merger as highly "synergistic" in the short term although we see some benefits. Benefits to Inprise include the addition of more (and less expensive) developers in a tight US IT labour market, access to Linux expertise, and better retail channel distribution. Benefits to Corel include a hefty cash infusion, additional managerial talent and expert software developers, potential sell-through of end-to-end solutions to Inprise's blue chip client list (Sabre, Ericsson etc.) and access to strategic partners. WordPerfect Office 2000 for Linux Looks Impressive. On a separate note, Corel demonstrated the beta version of its native Linux version of WordPerfect Office 2000. We were impressed with the functionality shown in the beta presentation. WordPerfect, Quattro Pro (spreadsheet) and Corel Presentations (a PowerPoint-like product) were all shown in the demonstration. These products are expected to be released as a suite in early April. We note that the product has reached the level where the look and feel is virtually indistinguishable from a Windows-based product. Wide-Scale Desktop Linux Deployment Still Years Away Though Channel/OEM Front Could be Active. We continue to believe that Linux on the desktop is several years away. Although a recent Merrill Lynch's Corporate Buyer Survey indicated that many organizations are considering Linux, we believe that most interest is for Linux in specific server situations. However, Linux also needs a substantial set of applications before it is legitimized as a desktop solution. Corel?s upcoming office productivity suite will undoubtedly help in this respect. [CORL] The securities of the company are not listed but trade over-the-counter in the United States. In the US, retail sales and/or distribution of this report may be made only in states where these securities are exempt from registration or have been qualified for sale. MLPF&S or its affiliates usually make a market in the securities of this company. Copyright 2000 Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). This report has been issued and approved for publication in the United Kingdom by Merrill Lynch, Pierce, Fenner & Smith Limited, which is regulated by SFA, and has been considered and issued in Australia by Merrill Lynch Equities (Australia) Limited (ACN 006 276 795), a licensed securities dealer under the Australian Corporations Law. The information herein was obtained from various sources; we do not guarantee its accuracy or completeness. Additional information available. Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities ("related investments").