Inprise/Borland Corp. (Nasdaq: INPR) and Corel Corp. (Nasdaq: CORL) said Tuesday they are calling off their proposed merger.
In early trading, Corel's shares were up 21 percent and Inprise shares gained 15 percent to 6 3/4.
The deal was terminated through a mutual agreement, the companies said, and no termination fees will be paid. The reciprocal stock option agreements have also been terminated.
Inprise: What's next?
The cancellation comes as no surprise. Corel's stock has tanked following poor first quarter results. Corel also sparked worries about its cash position.
As Corel's stock plunged, so did the value of the deal. Corel was going to pay $1.08 billion in stock for Inprise when the deal was initially announced in February. In about three months, the value of the deal was below $400 million.
Inprise/Borland announced April 28 that it had asked its financial adviser for an updated opinion on the fairness of the exchange ratio for its pending acquisition by the Canadian software developer.
Apparently, the adviser wasn't impressed.
Inprise Borland, which develops programming languages and application development software, said it was going ahead with business as usual. The company plans to leverage new platforms for Linux, Solaris, and Windows 2000, and provide services to Application Service Providers. It also plans to continue to invest in companies and technologies that complement its strategy.