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Novell confirms $2b unsolicited takeover offer from NY investment firm

Novell Inc., an enterprise network software and services vendor out of Waltham, Mass, has confirmed the receipt of an unsolicited $2 billion takeover bid from New York-based private investment management firm, Elliott Associates, L.P.

Elliot made an offer of $5.75 per share in cash yesterday after the close of the markets. The company already owns 8.5% of Novell’s common stock, which makes Elliot one of the largest shareholders.

In a letter to Novell’s board of directors, Elliot Portfolio Manager Jesse Cohen wrote that his firm had been keeping an eye on Novell for a “considerable period of time,” writing:

Over the past several years, the Company has attempted to diversify away from its legacy division with a series of acquisitions and changes in strategic focus that have largely been unsuccessful. As a result, we believe the Company’s stock has meaningfully underperformed all relevant indices and peers.

While Novell is perhaps best known for its work in the inception of the local area network, the company has come to specialize in Linux. Novell owns Suse Linux and leads the Mono project, a free and open-source .NET development framework with multi-platform support.

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