WordStar International Inc, Novato, California and SoftKey Software Products Inc, Mississauga, Ontario have invited Cambridge, Massachusetts-based Spinnaker Software Corp to join their merger party, making it a three-way affair. Spinnaker is best known for the low-end PFS: line of desktop applications that it bought from Software Publishing Corp a couple of years ago, but has also just bought utilities developer PowerUp Software Corp. The three-way alliance is bad news for employment prospects: the trio has agreed to implement substantial reductions in employees and facilities. Many WordStar and SoftKey operations are likely to move to Spinnaker’s facility in Cambridge, and some WordStar facilities will close. As under the previous agreement, SoftKey shareholders get the choice of either 3.6 WordStar or 3.6 new SoftKey non-voting exchangeable shares, for each SoftKey common held. Under terms of the new agreement, Spinnaker shareholders will receive between 1.615 and 1.657 WordStar common shares per Spinnaker share, depending on the number of Spinnaker common shares issued in connection with the previously announced Spinnaker rights offering to be completed in conjunction with the merger. In the rights offering, each Spinnaker shareholder will get the right to buy one Spinnaker share, at a price of $1.50 per share, for each 1.403 Spinnaker shares already held. All shares bought in the rights offering will be exchanged for WordStar common at the same exchange ratio. The exchange ratio is subject to a contingency adjustment, which is not expected to exceed 0.093 WordStar shares per Spinnaker share. Each SoftKey exchangeable will be swappable at any time for one WordStar. Subject to approvals, it is anticipated that the transaction will be completed in November. Spinnaker’s principal shareholder, an affiliate of Harvard Management Inc, has agreed to vote its 45% of the outstanding Spinnaker common in favour. On completion of the three-way transaction, SoftKey holders will hold about 53%, Spinnaker holders about 31% and WordStar holders some 16% of the enlarged company. SoftKey will proceed with its plan to close its Boca Raton, Florida facility. The new WordStar will have distribution access to about 15,000 superstore, retail, mass merchant and warehouse club locations, including CompUSA Inc, Office Depot Inc, Radio Shack, Walmart, Circuit City, Price Club and Costco. SoftKey officers take the top two posts at the firm.
