Canada’s Zi Corporation Hopes to Fend Off Nuance Takeover; Companies Issue Dueling Statements

Zi Corporation (NASDAQ: ZICA), a struggling Calgary, Alberta-based company whose software is designed to speed text entry on mobile devices, today rejected a takeover offer from Burlington, MA-based speech recognition giant Nuance Communications (NASDAQ: NUAN). Nuance reacted angrily, calling the rejection “perplexing and inappropriate” given Zi’s financial condition.
Last Thursday—the same day Zi announced widening financial losses for the second quarter of 2008—Nuance pounced, saying in a letter to Zi’s board of directors that the time for a sale of the company had come. Nuance noted that Zi was hemorrhaging cash and that low stock trading volumes had put the company in danger of being delisted by the NASDAQ exchange. “We believe that a negotiated transaction with Nuance would be the best way for Zi Corporation to maximize shareholder value, and in particular, to offer substantially superior value…relative to any available alternatives,” Nuance CEO Paul Ricci said in a the letter, which Nuance released to the media. [click heading for more]