Vector Set to Acquire Corel

The struggling Canadian software firm on Thursday indicated that it was about to be acquired by San Francisco's Vector Capital Corp.

Struggling Canadian software firm Corel Corp. on Thursday indicated that it was about to be acquired by San Franciscos Vector Capital Corp.

In March, Corel admitted that it was actively trying to find a buyer for its business and had signed a non-disclosure and standstill agreement with Vector Capital that let Vector investigate a takeover bid.

On Thursday, Corel said the negotiations with Vector Capital were continuing for a potential transaction for the acquisition of the company. Under the existing agreement between the two firms, Vector Capital has the contractual right to make an offer to Corels shareholders to purchase all common shares at a price of $1.10, but the deal appears likely to be struck below that price.

"In light of recent trading activity in Corels common shares, Corel has announced that there is a high likelihood that it will shortly enter into a definitive agreement with Vector Capital for a transaction at a price per common share which will be below US $1.10 per share and which the Board of Directors will recommend that shareholders approve.

"Corel will make a further announcement upon entering into any definitive agreement with Vector Capital or terminating discussions, whichever occurs," the company said in a short statement released on Thursday.

Corels share price closed $0.09 cents or 8.65 percent lower at $0.95 cents on Thursday as some 4.8 million shares changed hands in trade on the Nasdaq index.