Investors punish Zi for reticence in Nuance transaction
August 19 2008 - 1:50 pm ET | Colin Gibbs | RCR Wireless News
Nuance Communications Inc. went on the offensive in its effort to acquire Zi Corp., calling Zi’s unwillingness to enter negotiations “perplexing and inappropriate.”
Nuance, a behemoth on the speech-recognition playground, last week offered an unsolicited, 80-cents-per-share bid for Zi, marking a 150% premium over the stock’s closing price the day before. But Zi, which develops software for mobile search, input and advertising, spurned its suitor on Friday, saying the proposal “does not recognize the full value of Zi.”
Nuance fired back Monday, with CEO Paul Ricci saying in a prepared statement that the offer was fair “in light of the disappointing financial performance and cash outlook Zi reported last week. … In fact, it is hard to imagine that the Zi board’s unwillingness to negotiate with Nuance and to provide information that would support a basis for a higher offer is consistent with the Zi board’s fiduciary duties to act in the best interests of Zi and its shareholders.”
Investors seemed to agree, as Zi shares fell 5 cents, or more than 7%, to 58 cents Tuesday morning. Nuance shares fell slightly, losing just more than 1% to $16.11 by mid-day.
