The pending merger between software vendors Corel and Inprise/Borland looks to be on shaky ground.

Following a recent slide in the share price of its proposed merger partner, Inprise/Borland announced on Thursday that it has asked its financial advisor to re-evaluate the "fairness" of the financial terms of the agreement the two signed on February 6.

Inprise/Borland's board of directors has requested Broadview International LLC, which also advised the company in February, to update its opinion on the fairness of the transaction terms to Inprise/Borland shareholders.

Overvalued Under the terms of the February merger agreement, holders of Inprise/Borland stock would receive 0.747 of a Corel share for each share of common stock in Inprise/Borland. At the time, the deal was valued at $2.44 billion.

Corel shares, however, have lost much of their value since the agreement, when they were trading in the $19 to $20 price range. At the close of trading on the Nasdaq exchange yesterday, Corel shares had recovered slightly to close at $7.65.

Only a week ago, however, Inprise/Borland still maintained that the merger was on schedule, despite a pending lawsuit and news that Corel was running out of money.

Unsure In Thursday's statement, Inprise/Borland said its board of directors had decided to ask for a new opinion on the merger terms, after taking into account, among other things, Corel's first-quarter financial results and other recent statements concerning the company's cash position and near-term financial prospects.

For its first quarter, ended February 29, Corel reported a net loss of $12.4 million, or 19 cents per diluted share, compared to a net loss of $14.6 million, or 24 cents per share, for the same quarter last year.

Broadview is expected to complete its updated financial review within the next few weeks, Inprise/Borland said.

Losses
Separately, Inprise/Borland also announced a net loss of $1.1 million, or 2 cents per share, for its first quarter of fiscal year 2000. In the comparable quarter a year ago, the company reported a net loss of $25.6 million, or 54 cents per share.

Revenue, meanwhile, rose to $46.5 million, from $43.4 million a year ago.