On August 18, Quark said it made a proposal to acquire all or part of its competitor, but was spurned.
"Since last week, we have again tried to open a dialogue with Adobe, but to no avail--they have not returned our phone calls," Fred Ebrahimi, Quark's president and CEO, said in a statement. "We wanted to engage in friendly discussions regarding the specifics of our proposal, but Adobe is not even willing to do that.
"In light of current market conditions and our desire to do a friendly deal, we do not believe that a hostile transaction at this time would be beneficial to Quark, Adobe, the Adobe stockholders or our respective customers," added Tim Gill, Quark's founder and chairman. "Not only would this involve a protracted and expensive legal battle in light of Adobe's poison pill and other defenses, but we are also concerned that it could significantly detract from our day-to-day business operations."
Analysts were not surprised by Quark's move to drop the bid.
"I don't think anyone on Wall Street took these acquisition overtures very seriously because Quark is a much smaller company?and they were never able to substantiate that they had the financing, in this case $2 billion," said Peter Rogers, an analyst at Volpe Brown Whelan. "This was a very low-credibility situation from the beginning."
Quark said it will continue to pursue other acquisitions.
Adobe, for its part, said it was pleased that Quark decided not to pursue the acquisition.
"We are very grateful for the tremendous support we have received from our business partners, customers and our employees," CEO John Warnock and president Charles Geschke said in a statement. "We continue to focus on the exciting opportunities available to us."