Private equity firm makes $2bn approach for Novell

Enterprise software provider Novell has confirmed it has received an unsolicited approach from hedge fund Elliott Associates LP to buy the company for $5.75 per share, or $2bn, a premium of 49% over its current enterprise value. Elliott Associates already holds 8.5% of Novell, and in a letter sent

Enterprise software provider Novell has confirmed it has received an unsolicited approach from hedge fund Elliott Associates LP to buy the company for $5.75 per share, or $2bn, a premium of 49% over its current enterprise value.

Elliott Associates already holds 8.5% of Novell, and in a letter sent to the board of directors on 2 March stated its belief that the firm's recent attempts to diversify away from its legacy division have "largely been unsuccessful".

"As a result, we believe the company's stock has meaningfully underperformed all relevant indices and peers," Elliott said in the letter.

"With over 33 years of experience in investing in public and private companies and an extensive track record of successfully structuring and executing acquisitions in the technology space, we believe that Elliott is uniquely situated to deliver maximum value to stockholders," it continued.

In a statement Novell said it's board would "review Elliott's proposal in consultation with its financial and legal advisors."

At the end of February Novell posted a slight drop in sales, but increased profits and doubledearnings per share in its first quarter 2010.


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