Best known for its WordPerfect and CorelDraw word processing and graphics packages, the Ottawa, Canada-based company said its board of directors has approved the sale and would send it off to shareholders for a vote. The company had been looking for a buyer after soft sales and increased competition from companies like Microsoft and Adobe Systems. San Francisco-based Vector Capital, which has a controlling 20 percent non-voting stake in Corel that it acquired from Microsoft, said Corel’s best opportunity moving forward would be as a private company. One of Silicon Valley’s bigger VC players, Vector’s other investments include LANDesk Software, Real Networks, Savi Technology and ProcessClaims. As part of the deal, Corel’s shareholders will receive US$1.05 in cash for each common share. After which, Vector and its affiliates will own all of the outstanding shares of Corel. Late last week, there was concern that the per-share price was going to be lower than originally anticipated, but the two firms reached an agreement during Friday trading. ‘The price per share represents a premium of 42 percent to the market immediately prior to our announcement that Vector had entered into a non-disclosure and standstill agreement with Corel,’ Corel chairman James Baillie said in a statement. ‘With the assistance of Corel’s financial advisor, CIBC World Markets Inc., we have assessed all of the strategic alternatives available to Corel to maximize value for its shareholders. We have also received the opinion of CIBC World Markets that the cash consideration to be received by the shareholders under the arrangement is fair from a financial point of view. In light of these facts, the Board concluded that the proposal put forward is in the best interests of the company and its shareholders and has therefore confirmed the transaction subject to shareholder approval and the absence of a superior transaction proposal.’ If approved by the shareholders and the court, the transaction could be completed by the end of July 2003. Corel said it would reveal more details about the transaction on Monday during a conference call to investors. The company said it expects to apply to the court for procedural instructions within the next two to three weeks with a view to holding a shareholders meeting to consider the offer. Despite its difficult times in the post-bubble era, Corel’s luck seemed to change last year as it garnered more and more deals with PC vendors. In August 2002, Corel stunned Microsoft after it inked a deal with Hewlett-Packard to put its WordPerfect 10 and Quattro Pro 10 as the default business software for HP’s entire line of Pavilion desktop PCs instead of opting for a low-budget bundle of Microsoft’s Works. A week earlier, Corel announced a similar deal with Dell Computer, one that would bundle Corel’s WordPerfect Office tools on select models of its popular Dimension and Inspiron product lines. Like HP, Dell had historically only pre-loaded Microsoft products on its PCs. Gateway got into the act in October when it began including bundling Corel’s platforms into its desktop units. Where Microsoft Office will be charged on a per-user basis, Corel’s WordPerfect Suite doesn’t require volume commitments or an annual fee to upgrade. Source.