Novell gets buyout offer from hedge fund

A hedge fund that is already one of Novell's largest shareholders offered to acquire the struggling, cash-rich enterprise software maker for $2 billion.

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A hedge fund that is already one of Novell's largest shareholders offered to acquire the struggling, cash-rich enterprise software maker for $2 billion.

The unsolicited offer from Elliot Associates is for $5.75 per share in cash, a dollar more than Novell's closing price on Tuesday of $4.75 per share.

Because Novell is so cash rich, it had $991 million in cash and equivalents at the end of January (download PDF), Elliott says the deal values Novell as an enterprise alone at about $1 billion.

Despite Novell's strong bank account, the company's revenues continue to shrink. In its most recent quarter, which ended January 31, Novell's net revenue was $202 million, down 6% compared to a year ago. Income from operations was also down slightly year over year.

Elliott is Novell's third-largest shareholder, with 24.7 million shares, or 7.1% total.

Novell did not immediately respond to a request for comment.

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