The board of PC Docs Group International Inc, the Canadian document management software house, has firmly rejected a merger proposal from Open Text Corp, saying the $110m all share offer was coercive in nature and woefully deficient in value. Open Text, which develops web-based knowledge management applications, disclosed its unsolicited offer in a press release dated December 1 (CI No 3,550). Also based in Canada, Open Text claimed there were natural synergies between itself and PC Docs. These included the latter’s customer base being able to benefit from Open Text’s web-based technologies. The statement added that any deal would be dependent upon prior approval from the boards of both companies. And having considered the deal, PC Docs board issued a statement which read: The terms of Open Text’s proposal are extremely one-sided, ill conceived and onerous. Ben Swirsky, chairman of PC Docs, added, In the best interests of our employees, customers and shareholders, we will not allow Open Text’s conduct to distract us from our core business. The terms of the merger offer give PC Docs’ shareholders a significant premium of close to 40% over their pre-deal share price, but so far, Open Text has declined to state whether it will take this offer directly to PC Docs’ stock holders in a hostile bid. Such a move would be extremely unusual within the software industry where hostile bids run the risk of alienating the target’s key employees.
