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Nuance Communications, Inc. (NUAN) Submits Proposal to Acquire Zi Corporation

Nuance Communications, Inc. (NUAN), a leading provider of speech and imaging solutions worldwide, announced that it has officially submitted a proposal to acquire Zi Corporation (ZICA) for $0.80 per share. The proposal is subject to a mutually agreeable definitive agreement, the completion of limited and confirmatory due diligence, and the satisfaction of other general approvals and conditions.

“Nuance can offer customers a broader and more fully integrated product and technology portfolio than Zi Corporation can offer independently,” stated Steve Chambers, President of the Mobile and Consumer Services Division at Nuance. “We believe the combination of Nuance and Zi delivers significant benefits to both companies’ shareholders.”

The full-cash proposal represents a 150% premium over the August 13 Zi common stock closing price. Looking at the past 20 trading days, the offer represents a 125% premium over Zi’s average closing price.

Chambers added, “Our U.S. $0.80 per share all-cash proposal provides Zi shareholders with a substantial cash premium for their investment in the company. We would hope to work cooperatively with Zi Corporation and to immediately commence discussions regarding our proposal.”

In the offer, Nuance added an option in the event that the Zi Board of Directors did not want to provide limited due diligence. Under this option, Nuance offered a purchase price of $0.65 per share subject to a confirmation that Zi has not entered into any agreement to sell securities or incur debt since the last publicly released financial statements.

Nuance also tendered an option that it would be willing to commit up to $2 million in short-term financing under reasonable terms and conditions if the board felt that it would be necessary and beneficial at either per share price.

Interestingly, the submitted proposal prompted investors to make a run on Zi stock. During Thursday’s trading, Zi’s shares started the day at $0.35 and ended the day at almost double the price at $0.67 per share. As of Friday’s close, the Alberta-based Zi stated that its board “is considering the proposal”.

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