Open Text Intends to Acquire Hummingbird
7/5/2006
Open Text Corporation (TSX:OTC)(NASDAQ:OTEX) announced its intention to make an offer through a wholly-owned subsidiary for all of the common shares of Hummingbird Ltd. at a price of U.S.$27.75 per common share in cash, representing a premium of approximately 20.0% over the closing price of the Hummingbird Shares on the Nasdaq on May 25, 2006, the day prior to the announcement by Hummingbird that it had entered into an arrangement agreement with affiliates of the Symphony Technology Group and the offer price is U.S.$1.00 greater than the Symphony Technology Group offer. It is Open Text's intention to commence the offer by no later than July 15, 2006. In connection with its offer, Open Text has entered into lock-up agreements with shareholders of Hummingbird representing 3,179,725 common shares or approximately 18% of the issued and outstanding common shares of Hummingbird (the "Lock-Up Agreements") calculated as of June 19, 2006. Each party entering into a Lock-Up Agreement with Open Text has agreed to deposit, or cause to be deposited, and not withdraw (subject to certain limited rights of withdrawal) their common shares to the Open Text offer. Prior to entering into the Lock-Up Agreements, Open Text, together with its affiliates, owned 764,850 common shares of Hummingbird or approximately 4.3% of the issued and outstanding common shares of Hummingbird as of June 19, 2006. As a result of entering into the Lock-up Agreements, Open Text and its affiliates have acquired beneficial ownership (with the meaning of such term under applicable securities laws) of the common shares of Hummingbird subject to the Lock-Up Agreements, which, together with the common shares of Hummingbird already owned by Open Text and its affiliates, represent in the aggregate approximately 22.3% of the issued and outstanding common shares of Hummingbird as of June 19, 2006. Other shareholders of Hummingbird holding approximately 3.2 million common shares or approximately 18.2% of the issued and outstanding common shares calculated as of June 19, 2006 have also indicated to Open Text their support for a superior offer to the Symphony offer. The offer will be subject to certain customary conditions. Under the terms of the Lock-Up Agreements, the locked-up shareholders have agreed to vote their shares tendered to any Open Text offer against any competing transaction during the term of the lock-up. The lock-up agreement may be terminated by the locked-up shareholders in certain circumstances including, if the Open Text offer is not made prior to July 15, 2006, or if a third party publicly announces a competing offer at a higher price than the price offered by Open Text and Open Text does not amend its offer within a prescribed period to be at least equal to the price of such third party offer. Open Text is also entitled to compensation from the locked-up shareholders in the event of certain third party offers completed at a price greater than U.S.$27.75. The Company intends to finance the offer through cash on hand and committed loan facilities to be provided by a Canadian chartered bank pursuant to a binding commitment letter. The committed loan facilities include a term loan facility and a revolving loan facility. Open Text does not intend to issue equity in connection with the completion of this acquisition. Open Text has retained RBC Capital Markets to act as its financial advisor on this transaction. http://www.opentext.com
See Leonor's comments on our blog.
Hummingbird responds in a press release.
