Corel agrees to takeover by Vector

Software maker Corel on Friday said its directors have agreed to a takeover bid from San Francisco-based Vector Capital that values the company at $97.6 million, or $1.05 per share.

The agreement, which requires shareholder and Canadian court approval, comes a day after Corel said that it was likely to recommend approval of a deal that was below the $1.10 that it had been seeking.

Investment firm Vector Capital said in March that it would make an offer of no less than $1 per share for the Canadian company's stock. At that point, the firm had already bought 22.9 million shares of Corel stock that had been owned by Microsoft.

The bid is more, but not substantially more, than the $73 million in cash that Corel had at the end of February, the end of its first quarter.

Corel, known as the maker of the CorelDraw and WordPerfect software programs, can still accept a better deal if it comes along. But the software maker would owe Vector a $2 million fee for the breakup of the deal and would be responsible for paying some of the firm's expenses related to its bid.

"The arrangement represents an opportunity for the shareholders of Corel to realize the value of their shareholdings," Corel Chairman James Baillie said in a statement. "The price per share represents a premium of 42 percent to the market immediately prior to our announcement that Vector had entered into a nondisclosure and standstill agreement with Corel."

Corel shares closed Friday at 93 cents, down 2 cents, or more than 2 percent.

The company has had significant losses and several rounds of layoffs in recent years. It nonetheless garnered attention last year when a number of PC makers chose its software over that of rival Microsoft.

Although Corel is best known for its office software, its comeback bid has been centered more on tools that add Extensible Markup Language (XML) functions to documents.

CNET News.com's David Becker contributed to this report.