Feeds

Novell mulls hedge fund takeover

Send in the bankers and lawyers

Combat fraud and increase customer satisfaction

Commercial Linux distro and systems software maker Novell said last night, after it had received a takeover deal from a New York hedge fund named Elliott Associates to take Novell private, that it would put out a statement about the proposal. It took nearly four hours to come up with the statement, and the wonder is why.

Here's what Novell said:

Novell, Inc. today confirmed that it has received an unsolicited, conditional proposal from Elliott Associates, L.P. to acquire the Company for $5.75 per share in cash. Novell anticipates that its Board of Directors will review Elliott's proposal in consultation with its financial and legal advisors. J.P. Morgan is serving as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to Novell.

As El Reg explained yesterday, when the deal was announced in the wake of Wall Street shutting down trading for the day, the $5.75 per share deal represents a 21 per cent premium over the closing price of $4.75 per share for Novell's stock immediately before the deal was announced.

But when you do the math and take into account the $991.3m in cash and investments that Novell has on hand, what Elliott is really proposing is to take possession of Novell for about $940m, which would pay for the 91.5 per cent of the company that Elliott does not already own itself or control through affiliates. (Elliott said in its takeover proposal to Novell's board that it started buying up shares on January 5 and had amassed an 8.5 per cent stake in the company already.)

In trading this morning, Novell's shares are up 29 per cent to $6.12 a pop, which would seem to imply that Wall Street expects a sweeter bid to be required for a deal to get done, and possibly other suitors to show an interest.

Elliott's move to acquire Novell could set off a bidding war for the firm, with IBM and Citrix Systems potentially joining in, and maybe even application software maker SAP. IBM could use its own Linux distro and x64 hypervisor as well as the systems management and identity management tools that Novell has taken possession of over the years, and it knows how to ride down a legacy software business like NetWare.

Citrix Systems could use its own Linux distro and some of the physical and virtual server management tools Novell has, too. And SAP, which needs to compete with Oracle with a complete stack of software could also make good use of SUSE Linux and start weaving together a software stack of its own that runs on x64, Power, Itanium, and mainframe iron. ®

High performance access to file storage

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
Batten down the hatches, Ubuntu 14.04 LTS due in TWO DAYS
Admins dab straining server brows in advance of Trusty Tahr's long-term support landing
Microsoft lobs pre-release Windows Phone 8.1 at devs who dare
App makers can load it before anyone else, but if they do they're stuck with it
Half of Twitter's 'active users' are SILENT STALKERS
Nearly 50% have NEVER tweeted a word
Oh no, Joe: WinPhone users already griping over 8.1 mega-update
Hang on. Which bit of Developer Preview don't you understand?
Internet-of-stuff startup dumps NoSQL for ... SQL?
NoSQL taste great at first but lacks proper nutrients, says startup cloud whiz
Windows 8.1, which you probably haven't upgraded to yet, ALREADY OBSOLETE
Pre-Update versions of new Windows version will no longer support patches
Ditch the sync, paddle in the Streem: Upstart offers syncless sharing
Upload, delete and carry on sharing afterwards?
Microsoft TIER SMEAR changes app prices whether devs ask or not
Some go up, some go down, Redmond goes silent
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.