Corel shares leap after Reuters exclusive on offers – 20th August

Reuters exclusively reported on August 20 that Canadian consumer software maker Corel Corp had received several proposals from private equity and strategic buyers, sending its shares up nearly 16 percent. The news came two days after Corel said its largest shareholder, private equity firm Vector Capital, was withdrawing its offer to buy the remainder of the company. Investors had reacted negatively to that news. But the Reuters story revealed that the reason behind Vectors pullout was the higher offers. As a shareholder, Vector had to withdraw its own bid to prevent a conflict of interest as it considered the other bids. Although Corels shares are thinly traded, risk arbitrageurs called the reporter, Anupreeta Das, to say that the Reuters story had helped them re-interpret Vector`s actions as positive rather than negative, which is why the shares jumped so much. More than five hours after the Reuters story, Corel confirmed it was in discussion with a third party.