Nuance halves Zi buyout offer to $20 million

Nuance Communications Inc. today made an all-cash offer to acquire Zi Corp. for about $20 million, half the value of a previous offer made before the economic crisis intensified in September.

Nuance, a Burlington-based maker of speech-recognition software and other communications technologies, offered to acquire all outstanding shares of Canada-based Zi for 40 cents apiece. Nuance said its offer expires on Dec. 31.

In August, Zi rejected Nuance's earlier offer of 80 cents per share, or $40.4 million, as too low.

"We continue to believe that our all-cash offer is a compelling opportunity to create value for the stakeholders of both companies," Nuance chairman and chief executive Paul Ricci said in a statement. "Our revised offer reflects recent adverse changes in market conditions, and in Nuance's assessment of Zi's valuation following completion of a due diligence review."

Nuance said it hopes Zi shareholders "will recognize the immediate value and attractive liquidity opportunity this proposal represents and will tender their shares in favor of our offer."

Milos Djokovic, Zi's president and chief executive, said in an e-mail his company had no immediate response to Nuance's revised offer. But he said he hoped to be able to comment by the end of the business day.

Nuance noted its latest proposal still represents a 25 percent premium to Zi's closing share price the day before the original offer, and a 38 percent premium over the stock's Tuesday closing share price of 29 cents.

Shares of Zi rose 7 cents, or 24 percent, to 36 cents per share in midday trading. They have ranged from 24 cents to $1.23 over the past year, and have lost nearly 60 percent of their value in the year to date.

Shares of Nuance rose 27 cents, or 3.1 percent, to $9.05 in Nasdaq Stock Market trading. (AP)