Software firm Novell rejects Elliott's $2-billion unsolicited takeover offer
22 March 2010
Business software company Novell Inc on Saturday rejected private equity firm Elliott Associates' $2-billion unsolicited takeover offer as ''inadequate'' since its offer ''undervalues the company's franchise and growth prospects.''
On 2 March 2010, New York based Elliott Associates, which manages more than $16 billion of capital for large institutional investors and wealthy individuals and holds 8.5 per cent stake in Waltham, Massachusetts-based Novell, had offered to acquire the remaining 91.5 per cent at $5.75 a share, a premium of 21 per cent over Novell's 1 March closing price. (See: Elliott Associates makes $2 billion unsolicited bid for Novell)
Novell's board is reviewing various alternatives to enhance stockholder value, which include a stock repurchase, joint ventures, a cash dividend, a recapitalization and a sale of the company, the company said in a statement.
Greenwich, Connecticut-based investment firm Blue Harbour Group, which holds a 4 per cent stake in Novell, said in a statement on Saturday that it supports the Novell's board decision.
In 2008, Elliott had made an unsuccessful bid for Epicor Software Corp and by putting Novell into play, could wake up bigger players like Hewlett-Packard Co, Cisco Systems Inc. or Microsoft say analysts, but added that Microsoft's bid could attract severe scrutiny from regulators.
At the time of making its bid, Elliott, had said that Novell's plan to revive its businesses have failed even as it struggles to maintain growth during the past 10 years, which has seen its stock losing its value by 85 per cent.