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August 7, 2006
The Hummingbird Door Closes; Open Text Offer Accepted
The acceptance by Hummingbird's Board of Directors of the Open Text offer closes the door on this summer saga, albeit with less drama than I predicted.
I do find it surprising that even a ripple of a bidding war never occured since the agreed-upon Open Text bid remains at only 10 cents more per share than the preceeding Symphony offer. Plus, there's that $11.7 million termination fee payable to Symphony. Still, Hummingbird reports that the offer represents a 4.1 percent higher bid than Symphony and a 20.5 percent premium over the company's May 25 share price.
Now that the saga is over, the real effects will surface. There is clearly redundancy between the two companies, and that can only mean some amount of layoffs. We would be surprised however, if that prediction extends to the RedDot division, as Open Text fills a hole with this solid WCM solution. In addition, the merger creates a larger competitor to the platform players in the ECM market but also bolsters the "foes can be friends" theory in terms of Open Text's June decision to provide Oracle-based solutions as well as to continue strong SAP and Microsoft Sharepoint integrations.
Finally, the acquisition forces Open Text to continue proving that numerous acquisitions equal strong, integrated vertical and horizontal solutions while simultaneously pleasing longtime Hummingbird customers.
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Posted by Leonor Ciarlone at August 7, 2006 11:37 AM
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