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Novell rejects “inadequate” takeover bid

By Hani Megerisi

Posted on 22 Mar 2010 at 15:07

Novell has rejected a $2 billion takeover bid from New York-based hedge fund Elliot Associates.

The offer of $5.75 per share was deemed “inadequate” and undervalues the value of the company, Novell said. Elliot already owns an 8.5% stake in the software manufacturer.

Private equity firm Blue Harbour Group, which has a 4% stake in Novell, backed the company’s refusal of the bid. In a release, the investment company said: "We agree with Novell's management and board of directors that the company's value significantly exceeds Elliott's proposal.”

Novell said in a statement that its board of directors have now approved a review of “various alternatives”, and has hired JP Morgan to advise it. These include the possibility of a strategic partnership, stock repurchases or selling off the company as a whole.

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User comments

$2 Billion -let's get it right!

Accuracy is a key skill in journalism.

By milliganp on 22 Mar 2010

Error corrected, we apologies for the mistake

Hani Megerisi

By HaniM on 22 Mar 2010

It surprises me that Novell is still around.

What do they actually DO now? Netware was so 1990s...

By JohnGray7581 on 22 Mar 2010

They hold cash!

Novell has 3 businesses. The old Netware Business which is in decline but profitable as it's almost entirely ongoing support revenue. They own Suse which is the #2 commercial Linux distribution and do quite well selling Linux support vouchers to Microsoft to keep Red Hat out of Microsofts key accounts. Finally they have about $1 Billion in ofshore profits that they can't repatriate to the US without paying Tax.
It's the general theory that Elliot has a plan to release this cash.

By milliganp on 22 Mar 2010

Microsoft should buy Novell

At least then they'd have a decent file server and directory platform. Anyone who's migrated from Novell to Microsoft will know what I'm talking about, there's a video on YouTube showing a Windows server taking half an hour to do what an old Novell server does in a split second!

By mspritch on 26 Mar 2010

Novell and Microsoft

Suse linux (Novell Linux) is the most underrated excellent linux distro. I know there are others however their Linux distribution is actually very good and it is a pleasure to use. Bad thing is that Novell partnered with Microsoft that enable Microsoft to use unix legacy, opposite is not true Microsoft only permit their patents to be used by Novell clients not in general.

By HopeLESS on 29 Mar 2010

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