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December 1, 1998

OPEN TEXT LOOKS TO BUY PC DOCS FOR $113M

By CBR Staff Writer

Document management software house PC Docs Group International Inc, said it has received an unsolicited merger proposal from Open Text Corp, a developer of web-based knowledge management applications. The two companies, both based in Canada, stressed that the overture was not an outright offer to PC Docs or its shareholders, but a proposal, itself contingent upon a number of factors, including due diligence and approval by both boards. Under terms of the deal outlined in a letter to the board of PC Docs on Monday, the company’s shareholders would receive one share of Open Text for each four shares held. That level represents a premium of 38% over Monday’s closing prices for both issues and values the deal at about $112.7m. Open Text has requested a response by December 8. PC Docs says it will call a meeting of its board to begin considering the proposal and will respond in due course. Open Text figures there is a natural synergy the document management customer base of PC Docs and its collaborative knowledge management products, with PC Docs set to benefit from the web-based technologies it can bring to the table. The main contention is that PC Docs users would be able to extend their applications at the enterprise and extranet levels using Open Text’s Livelink software, which enables workgroups to find, organize and manage project information. Open Text would, in turn, be able to extend its reach from its traditional manufacturing sector into the legal and accounting markets, where PC Docs is strong, as well as gain a wider presence in Europe. On the heels of the news, Open Text shares slipped $0.4375 to close at $ 17.875 Tuesday, while PC Docs rose $0.7813, or nearly 24%, to $4.0938.

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