Corel wins shareholder vote despite vocal opposition

TORONTO — As anticipated, Corel shareholders have voted in favour of Vector Capital’s US$1.05 per share offer to buy the company’s holdings.

The vote took place Wednesday at 4:00 p.m. at a downtown Toronto hotel.


Francisco venture capital firm Vector Capital first presented its offer to Corel management in March. Corel hired CIBC World Markets to evaluate competing bids, but no serious offers were tendered.

Corel chairman James Baillie said in June that the company was satisfied with the Vector offer and recommended its acceptance to shareholders. President and CEO Derek Burney acknowledged that the recommendation met with mixed response.

The group leading the anti-Vector charge is An unofficial poll on the group’s Web site states that close to 10 million shares would be voted against the bid — which isn’t nearly enough to overturn it. Despite this, Charles Golden, a Corel shareholder and one of the group’s organizers, based in Ohio, was optimistic right up until the last minute that the firm could be saved from the sale and that shareholders would see the light.

“”It’s no done deal,”” he said in the hours leading up to the vote. “”Vector needs two-thirds of the vote. They have told the media that it was a done deal. The Corel board of directors is not in the least sided with the Corel shareholders, they have sided completely with Vector. They have done everything to make Vector win.””

He added that he’s spoken Corel shareholders in the U.S. that had not received their voting proxies, including some of his family members. “”My son received his on the 12th of the month; my daughter did not receive hers at all.””

Duncan Stewart, a financial analyst with Tera Capital Corp. in Toronto, said prior to the vote that he was reasonably confident the sale would go through, but there was always room for an upset.

“”( have certainly put together a good story in the press. It’s really hard to tell what’s going to happen ahead of time,”” he said. But for every shareholder that is holding onto their Corel investment, “”there’s going to be someone saying, ‘You know what? I’m just sick to death of this thing, let’s just get rid of it.'””

IDC Canada Ltd. analyst Warren Shiau said that many Corel shareholders are emotionally attached to their stake in the company, but that wasn’t enough to turn the tide away from Vector.

“”If this is the price that’s Vector’s going to pay . . . it’s hard to say that that’s not a fair price,”” he said. “”As long as people think it will make Corel more stable, it’ll probably end up being better for them.””

Putting Corel’s ownership in the hands of Vector may help turn the company around fiscally. He said that assuming Vector has the funds to back it up, they could inject a fresh round of R&D into Corel and create a greater sense of stability at the company.

He likened the Vector bid to Baan’s sale to U.K. company Invensys, which bought the software company in 2000 for US$708 million — there were some bumps in the road after the sale, but it worked out positively for the most part for Baan.

Invensys announced in April that it would sell Baan and other units to help reduce its debt load. The company struck a deal with an investment group to sell Baan for US$135 million in June.

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