Borland, Corel Call Off Merger Plans
Bake Sale Results Disappointing
Borland/Inprise Corp. and Corel Corp. said Tuesday they are calling off their proposed merger and their syndicated TV show "Who wants to Merge with a Billionaire."
In early trading, Corel's shares were up 21 percent, while Inprise shares gained 15 percent to 6 3/4. Shares in both Tums and Advil, however, have fallen with sales declines in Scotts Valley and Ottawa.
The deal was terminated through a mutual agreement, the companies said, and no termination fees will be paid although the bankers will collect fees first for making the deal, then making the deal go away. "This is what we call a win-win situation," said Dash Slipshod, lead banker at Dewey, Screwem and Howe. "We think there's a greater value for each company separately, now that we've collected our fees."
The cancellation comes as no surprise. Corel's stock has tanked following poor first-quarter results. The Ottawa-based company also sparked worries about its cash position, especially in light of depressed sales at its recent "Buy-one-Get-10-Free bake sale. "The muffins were good, but frankly we were disappointed with the overall volume here. Nonetheless, we believe that our next Linux effort, nakedpicturesofmywife.com will be a big hit, " said Michael Cowpland, CEO of Corel, from his holding cell at Kingston Penitentiary.
As Corel's stock plunged, so did the value of the deal. Corel was going to pay $1.08 billion in stock for Inprise when the deal was initially announced in February. In about three months, the value of the deal was below $37. "We decided we could just download Linux from the web for free," said Dale Fuller, from his silicon valley estate. "After all, we're webvolutionaries and now with the Internet available on so-called computers, that's a vision we think shows thought leadership in emerging market exchanges for ASPs in the value based realtime network economy of the future today." Inprise would not comment on rumors that they had bought the domain name Corelsucks.com.
Borland announced April 28 that it had asked its financial adviser for an updated opinion on the fairness of the exchange ratio. Once the advisors stopped laughing, they realized there was a bigger opportunity in fees from cancellation.
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