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By | Kelly Fiveash 22nd March 2010 11:31

Novell snubs hedge fund's $1bn takeover bid

Struggling software vendor says it's worth more than that

Novell has spurned an unsolicited $1bn cash takeover bid from Elliot Associates.

It said on Saturday that it had considered the company's offer to acquire Novell for $5.75 per share in cash, but concluded such a deal was "inadequate" and "undervalued" Novell's "franchise and growth prospects".

Earlier this month New York-based hedge fund Elliot, which already holds an 8.5 per cent stake in Novell, said it wanted the rest of the struggling software maker including the $991.3m in cash Novell is currently sitting on.

In effect, taking out the value of the Novell cash pile and stake Elliot already had in the firm, the hedge fund was trying to buy Novell for about $940m.

Novell said at the weekend that its board was looking at "alternatives" to help plump up value for its stockholders.

"These... 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 recapitalisation and a sale of the Company," it said. ®

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