By Mina Kawai March 20 (Bloomberg) — Novell Inc. said a $5.75-a-share acquisition offer from Elliott Associates LP is “inadequate” and undervalues the maker of Linux operating-system software. Novell’s board is reviewing its alternatives, which include a stock repurchase, joint ventures, a cash dividend, a recapitalization and a sale of the company, the company said in a statement. Elliott Associates, a New York-based fund manager which owns about 8.5 percent of Novell stock , made an unsolicited, $2 billion offer in a letter made public on March 2, saying that Novell’s shares have “underperformed all relevant indices and peers.” Novell has struggled to sustain growth during the past 10 years, sending its stock down 85 percent. The company reported its sixth straight quarterly sales decline last month, with Chief Financial Officer Dana Russell predicting “muted” revenue in the current quarter. Novell spokesman Ian Bruce declined to comment further on today’s statement. Scott Tagliarino , a spokesman for Elliott, couldn’t immediately comment. Besides Linux, Novell’s other business units include identity and security management, systems and resource management, and workgroup products such as NetWare and its GroupWise e-mail system. Elliott Associates has more than $16 billion under management. It was one of several parties in a 2006 buyout of Metrologic Instruments Inc., a maker of bar-code scanners. Elliott helped fund the 2009 acquisition of MSC.Software Corp. by private-equity firm Symphony Technology Group LLC. Waltham, Massachusetts-based Novell fell 8 cents to $5.64 in Nasdaq Stock Market trading yesterday. The stock is up 36 percent year to date. To contact the reporter on this story: Mina Kawai in New York at minkawai@bloomberg.net .
Continue reading here:
Novell Calls Elliott $5.75-Share Offer `Inadequate’; Board Reviews Options
