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OpenText makes play for PC DOCS -- again

OpenText makes play for PC DOCS -- again

If at first you don't succeed, try again. OpenText last week announced a second takeover bid for document management software vendor PC DOCS Group, which is already negotiating a buyout with Hummingbird Communications.

PC DOCS directors rejected a $US106 million OpenText bid last December. Hummingbird made a $US150 million stock offer in March.

OpenText's latest offer stems from the clause in the PC DOCS/Hummingbird offer that provides a mechanism for competing bids, says Thomas Hearne, OpenText's chief financial officer.

"We still have a lot of interest in [PC DOCS]," Hearne said. "We're in a good position for integrating the two companies from a technology and employee perspective."

PC DOCS' only public response was to acknowledge it had received the offer and that it will be submitted to a special committee of the board of directors and financial advisers for "due consideration". OpenText would have to get 66.7 per cent of PC DOCS shareholders to agree to its bid.

On the surface, an OpenText/PC DOCS combination makes more sense because both companies are involved in the document management arena, says Paula Boyle, senior analyst at Kinetic Information, a market consultancy based in Massachusetts. Ontario-based Hummingbird specialises in business-intelligence software.

"PC DOCS and OpenText targets a much bigger slice of the [market] pie with a much larger potential," Boyle says. "Customers would be better off with a document-minded company."

Boyle added that the market for pure document management companies is shrinking and becoming a more difficult sell. It is easier for a company like OpenText to add more customers through an acquisition of PC DOCS than through normal sales channels, Boyle says.


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