Borland (NASDAQ:BORL)
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Micro Focus International PLC (MCRO.LN), which has proposed a $113 million offer for Borland Software Corp. (BORL), Monday said both companies had agreed to settle a class action lawsuit brought against Borland in the U.S. to avoid delays in closing the acquisition and costly legal bills.

Micro Focus said the settlement amount "is immaterial" and won't affect the financial considerations of the merger, or the timing of the companies' respective shareholder meetings to vote on it.

The settlement was for a class action lawsuit filed in Texas against Borland, Micro Focus and others on the alleged grounds that the proposed merger consideration and sale process was unfair, an allegation that the two parties believe is "wholly without mertit."

Micro Focus' general meeting to vote on the acquisition is set for July 24, and that of Borland July 22.

The $1.50 a share bid for Borland, which is backed by the Micro Focus and Borland boards, follows two previous, lower offers, after alternative bidders emerged.

Once a software heavyweight and Microsoft Corp (MSFT) rival, Borland's operating losses have grown over the last two years.

Micro Focus management said at the time of the acquisition announcement in May it has a "clearly defined plan to address the financial and operating performance of Borland, with a view to repositioning the business to achieve acceptable returns on sales and investment."

Micro Focus provides software that helps companies to manage and modernize existing applications. The company in May bought Compuware Corp.'s (CPWR) testing and automated software quality business. Together with Borland, both acquisitions would give Micro Focus a footprint in software testing which ensures that software works properly when it is in development.

At 0709 GMT Monday, Micro Focus shares were down 1.2%, or 4p, to 351p, underperforming a 0.48% rise in the FTSE 250.

-By Adrian Kerr, Dow Jones Newswires; 44 (0) 207 842 9309; adrian.kerr@dowjones.com

(Kathy Sandler contributed to this report)