Open Text Corp, whose unsolicited offer to acquire document management software house PC Docs Group International Inc was flatly rejected last week, has withdrawn the proposal that would have seen the two Canadian software companies merge. Open Text, which provides web-based collaborative knowledge management software, had been offering one of its shares for every four shares of PC Docs – valuing the deal at roughly $113m when the proposal was made. In a statement, Open Text expressed its disappointment with the board at PC Docs for its unwillingness to discuss the proposal, which it asserts was reasonable. The company said it still believes that a business combination between the two could create additional value for shareholders of both companies. Open Text’s withdrawal effectively dismisses the possibility of a hostile takeover bid, a rare occurrence in the software industry. Many on Wall Street were attracted to the synergies the proposed deal would offer and, after the announcement, PC Docs shares fell $0.625 to $3.6875, while Open Text slipped $0.6875 to $17.625.
