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Hedge fund offers $2B for Novell

Hedge fund offers $2B for Novell

The unsolicited offer comes from Elliot Associates

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

The unsolicited offer from New York-based Elliot Associates L.P. is for $5.75 per share in cash, a dollar more than Novell's closing price 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 Jan. 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.

Eric Lai covers Windows and Linux, desktop applications, databases and business intelligence for Computerworld . Follow Eric on Twitter at @ericylai or subscribe to Eric's RSS feed . His e-mail address is elai@computerworld.com .

Read more about enterprise applications in Computerworld's Enterprise Applications Knowledge Center.


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