Consumer software developer Corel (NASDAQ: CREL) said on Monday its majority shareholder has withdrawn its offer to buy out the rest of the company.
Corel said that Corel Holdings, which already owns 69 percent of the company and is controlled by private-equity firm Vector Capital, pulled its bid to “facilitate pursuit by Corel of alternatives for maximizing value for all … shareholders.”
Had it been successful, the bid would have seen Corel go private for the second time in five years.
In late March, Corel Holdings offered $11 a share for the Ottawa-based company. With 25.64 million shares outstanding as of the end of July, the deal values the entire company at about $282 million.
The stock’s free float is just 7.4 million shares, according to Reuters data.
Corel stock fell 43 cents, or 4.6 percent, to $9.01 on NASDAQ on Monday. It was down 18 Canadian cents, or nearly 2 percent, at C$9.43 in Toronto.
Corel also said a special committee of the board has been dissolved, and all its directors will now evaluate strategic alternatives for the company.
Corel, which makes software such as CorelDraw, WordPerfect, WinZip and WinDVD, was once a hot firm before its fortunes sank amid the bursting of the tech bubble early this decade.
On its Web site, Vector says that in early 2003, Corel was struggling as an unprofitable firm and that, in a bid to meet Wall Street’s expectations, management had put priority on several expensive new projects, rather than investing in core product lines.
Revenue was shrinking, and the stock was trading at a “deep discount” to its peers, Vector states.
That year, Vector paid about $120 million and took the company private. In May 2006, Corel closed an initial public offering of a minority stake, which left the private-equity firm with about 70 percent.
That offering received a lukewarm reception from a market that was enthralled at the time with energy and commodity stocks. The 6.5 million shares offered sold for $16 each, or $104 million in total, after Vector cut the size and price.
Corel mostly targets consumers and small businesses in selling its software. It has faced continued pressure, however, from Microsoft (NASDAQ: MSFT) as well as from free online software.
