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Novell Says Elliott Offer "Inadequate" - It's "business as usual"
Saturday, March 20 2010 @ 09:40 PM EDT

Ronald W. Hovsepian, President and CEO, Novell has put out a statement that it has considered the Elliott Management offer but finds it "inadequate". It's "business as usual at Novell". Here's the press release.

Here's the statement sent to customers:
Dear Customer:

I want to share with you an important announcement that Novell made today.

As you may know, on March 2nd, Elliott Associates, L.P. announced an unsolicited, conditional proposal to acquire Novell. Today we issued a press release announcing that our Board of Directors has concluded, after careful consideration, including a review of the proposal with its independent financial and legal advisors, that Elliott's proposal is inadequate and that it undervalues the Company's franchise and growth prospects.

Additionally, we announced that our Board has authorized a thorough review of various alternatives to enhance stockholder value.

Our relationship with you is extremely important to all of us at Novell, and I want to assure you that you can remain confident that we are committed to serving you as we always have. I also want to reaffirm to you that it remains business as usual at Novell, and we do not intend for there to be any changes in our relationship with you. Please do not hesitate to contact me or other members of our team at any time; we always strive to be available to provide you the best solutions for your needs.

On behalf of the Board and management team, I thank you for your ongoing commitment to Novell.

Sincerely,

Ron Hovsepian
President and CEO

Here's the body of the press release:

Novell's Board of Directors Rejects Elliott Associates' Unsolicited, Conditional Proposal as Inadequate

WALTHAM, Mass.
20 Mar 2010

Authorizes Exploration of Various Alternatives to Enhance Stockholder Value

Novell, Inc. (Nasdaq: NOVL) today announced that its Board has concluded, after careful consideration, including a review of the proposal with its independent financial and legal advisors, that the unsolicited, conditional proposal from Elliott Associates, L.P. to acquire the Company for $5.75 per share in cash is inadequate and that it undervalues the Company's franchise and growth prospects.

Novell also announced that its Board of Directors has authorized a thorough review of various alternatives to enhance stockholder value. 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.

Novell's Board is committed to enhancing value for Novell stockholders and believes that an exploration of alternatives is in the best interests of the Company and its stockholders. Novell's Board noted that there can be no assurance that this will result in any agreement or transaction. The Company does not intend to disclose developments with respect to any of these alternatives unless and until the Board has approved a specific course of action.

J.P. Morgan is serving as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to Novell.

Follow the link for the disclaimers and all the template info. More from the NYTimes:
The Blue Harbour Group, an investment firm that said it owns 4 percent of Novell, endorsed the company’s decision to reject Elliott’s bid.

“We agree with Novell’s management and board of directors that the company’s value significantly exceeds Elliott’s proposal,” Clifton S. Robbins, Blue Harbour’s chief executive, said in a statement. “Blue Harbour has been in active and constructive discussions with Novell’s management in recent months on various alternatives to create and unlock value.”


  


Novell Says Elliott Offer "Inadequate" - It's "business as usual" | 158 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Novell Says Elliott Offer "Inadequate" - It's "business as usual"
Authored by: Anonymous on Saturday, March 20 2010 @ 09:54 PM EDT
This is good news. Though the Linux community sometimes has disdain for Novell,
I am thankful for what they do.

[ Reply to This | # ]

Novell Says Elliott Offer "Inadequate" - It's "business as usual"
Authored by: Anonymous on Saturday, March 20 2010 @ 10:26 PM EDT
As both an open source advocate and a pro stock trader, this is great news! The
danger here was that Elliot is not one of the nice hedge funds that takes
companies private, removes their footguns, and then takes them public again all
healed up (some actually do that -- only some hedgies are "evil" --
but I won't state a percentage here).

Rather than fixing companies, Elliot take them apart and sell the scraps. This
could have resulted in a loss despite Novell winning against SCO -- suppose a
well-off large software company had appeared to buy that little scrap that was
the copyrights we all think Novell still owns....could have been fairly ugly --
what use would the courts have been if someone did this little sidestep?

I am breathing a sigh of relief, and hoping all the Novell stock I bought
doesn't tank back to the pre offer price as a result of this -- but that would
be a small loss compared to what *might* have happened. It's such thinly traded
stuff that buying or dumping a mere 1000 shares moves the price...(a couple of
the moves Friday were *me* -- the upticks, thanks)

Looks like the court case is going well -- that alone should boost their
prospects considerable. Wall street is fairly forward looking, and the effect
should kick in shortly. The saying is buy the rumor, sell the news -- but Wall
street is just now getting the rumor.

DougC

[ Reply to This | # ]

Off topic posts here
Authored by: globularity on Saturday, March 20 2010 @ 10:48 PM EDT
.

---
Windows vista, a marriage between operating system and trojan horse.

[ Reply to This | # ]

News picks
Authored by: globularity on Saturday, March 20 2010 @ 10:50 PM EDT


---
Windows vista, a marriage between operating system and trojan horse.

[ Reply to This | # ]

They always say that
Authored by: Anonymous on Sunday, March 21 2010 @ 03:26 AM EDT

...Board of Directors has concluded, after careful consideration, including a review of the proposal with its independent financial and legal advisors, that Elliott's proposal is inadequate and that it undervalues the Company's franchise and growth prospects.

Companies which receive a takeover bid almost always say that. This is not newsworthy in the slightest.

It's like when somebody sells a house. You always ask for more than you think you will get. And if you're buying a house, your initial offer is usually a bit less than you are really willing to pay.

Nothing to see here, move along.

[ Reply to This | # ]

Off course it was Inadequate - if it wasn't Elliot wouldn't have made the offer
Authored by: The Mad Hatter r on Sunday, March 21 2010 @ 03:31 AM EDT

While Novell isn't doing as well as Red Hat, it's got some decent products, and
with some minor changes (reducing Hovsepian's salary for instance) it could be
profitable. Elliot is looking for something undervalued that they can sell the
pieces of.

Still this may put Novell on the block. The problem is that the most likely
companies to have a use for Novell's products, also buy from it's competition
(IBM for example), and this would cause conflicts.

Of course Apple is sitting on some heavy cash...


---
Wayne

http://madhatter.ca/

[ Reply to This | # ]

Corrections?
Authored by: Anonymous on Sunday, March 21 2010 @ 08:11 PM EDT
Unofficial (as anon) corrections here

[ Reply to This | # ]

Official non-anonymous corrections here please!
Authored by: tiger99 on Monday, March 22 2010 @ 09:01 AM EDT
It seems that we were all asleep, or too busy, so Mr. or Ms. Anonymous above has
dropped a strong hint that we need a proper corrections thread. Always supposing
that any are needed, of course....

[ Reply to This | # ]

Novell Says Elliott Offer "Inadequate" - It's "business as usual"
Authored by: Anonymous on Monday, March 22 2010 @ 11:56 PM EDT
Perhaps the best entity to supercede Elliott and buy Novell would be Google.
1. Google, like Novell, has a strong company history built on networking. 2.
Google would get their own Linux distribution, along with some of the in-built
protections from the SuSE arbitration (maybe). 3. Google, among others, is
endangered by some of the various mergers that have created large and diverse
competitors, like Oracle (Sun) and EMC/VMware. 4. Novell's remaining
technologies (e.g. directory services, zenworks, OpenOffice extensions) are
complementary to Google's existing products, and could dovetail neatly. 5. Mono
probably wouldn't bother Google, as they seem to be satisfied to deal with
Microsoft on various levels; it could actually benefit Google, to thus have
better seats in the C# gallery.

[ Reply to This | # ]

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