Feeds

Novell mulls hedge fund takeover

Send in the bankers and lawyers

Secure remote control for conventional and virtual desktops

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. ®

Remote control for virtualized desktops

More from The Register

next story
Download alert: Nearly ALL top 100 Android, iOS paid apps hacked
Attack of the Clones? Yeah, but much, much scarier – report
You stupid BRICK! PCs running Avast AV can't handle Windows fixes
Fix issued, fingers pointed, forums in flames
Microsoft: Your Linux Docker containers are now OURS to command
New tool lets admins wrangle Linux apps from Windows
Facebook, working on Facebook at Work, works on Facebook. At Work
You don't want your cat or drunk pics at the office
Soz, web devs: Google snatches its Wallet off the table
Killing off web service in 3 months... but app-happy bonkers are fine
First in line to order a Nexus 6? AT&T has a BRICK for you
Black Screen of Death plagues early Google-mobe batch
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Go beyond APM with real-time IT operations analytics
How IT operations teams can harness the wealth of wire data already flowing through their environment for real-time operational intelligence.
The total economic impact of Druva inSync
Examining the ROI enterprises may realize by implementing inSync, as they look to improve backup and recovery of endpoint data in a cost-effective manner.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.