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Novell Up for Grabs

The first salvo might have missed, but the gates to the castle appear to be open. Novell has rejected a $2 billion acquisition offer from a New York-based hedge fund, but the bidding for the company might have only begun.

The company turned a cold shoulder on Elliott Associates, but it is now considering its options -- in other words, probably looking for a buyer. Check out this bit from a Novell statement quoted in Jeff Schwartz's RCPmag.com story:

"These alternatives include, but are not limited to, a return of capital to stockholders through a stock repurchase or cash dividend, strategic partnerships and alliances, joint ventures, a recapitalization and a sale of the company," the company said.

So, it's on now. The question now is: Who wants Novell? And for how much? (OK, that's two questions...but they're both relevant.) Elliott Associates is still in the game, apparently, but who else might be? Novell is a big buddy with Microsoft now after years of feuding, but there's no way Microsoft buys a vendor that large or with that much influence on the Linux community.

Surely, the SEC and EU would step into that deal faster than a teenage girl lining up to buy one of those Twilight books. Besides, Microsoft already has a patent agreement with Novell for SuSE Linux and therefore has what it needs from the Waltham, Mass.-based vendor. Who else would be in the mix, then? Novell has SuSE Linux to offer as well as a huge portfolio of services. But at a starting bid of $2 billion-plus, it won't be a cheap buy.

Maybe Elliott Associates will get its prize after all, and maybe there's no other vendor out there that wants to swallow Novell. That sure wouldn't be very exciting, though. We're hoping for an old-fashioned battle here. Let the siege begin!

Who would you like to see buy Novell and why? Sound off at lpender@rcpmag.com.

Posted by Lee Pender on 03/22/2010 at 1:22 PM


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