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  1. Technology
February 11, 1999


By CBR Staff Writer

By John Rogers

Rumors began circulating Thursday that Adobe Systems Inc is looking to acquire Corel Corp, either through a negotiated merger or an unsolicited takeover bid. Adding fuel to the fire was Corel’s unexpected announcement that it had implemented a shareholder right’s plan – commonly known as a poison pill – which would help insure that any possible business combination would be beneficial to itself and its investors. Corel staunchly denied that the two companies were in talks about a possible deal. The Canadian software company’s chief financial officer Michael O’Reilly told Reuters, We’ve never talked to them because they’ve never approached us in any way. But the possibility that Adobe is set to launch a bid for Corel was given a certain degree of credence by news of the poison pill adoption. Corel said late Thursday that its board of directors has implemented the shareholder rights plan but that it is still subject to regulatory approval. The company would have the public believe that the whole situation is little more than a coincidence, however, as O’Reilly said, Are we aware of a planned or proposed takeover bid? The answer is no, not by Adobe or anyone else. The shareholder rights plan will become effective as soon as the requisite regulatory approval is received by Canadian financial authorities, but there is no word on how soon that might occur. Once approval has been granted, Corel said, the plan will be operative until its next annual shareholders’ meeting on April 14, at which shareholders will vote on its permanent acceptance. To remain effective, it must be approved by more than 50% of voters at the meeting. No specific details of the plan were divulged but Corel said it has been adopted in order to provide Corel’s board of directors and shareholders with sufficient time to assess and evaluate any takeover bid and, in the event a bid is made, to provide the board of directors with an appropriate period of time to explore and develop alternatives which maximize shareholder value. The company also said that the plan is not intended to deter takeover bids. O’Reilley echoed that opinion and added to the air of mystery by admitting that if a bid was made for the company, it would have to be seriously considered.

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