Novell board rejects $2 billion acquisition bid

By Mass High Tech staff

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Novell Inc., a Waltham-based open-source network software company, has decided to reject an unsolicited takeover bid from Elliot Associates LP, a company stockholder.

The board of Novell (Nasdaq:NOVL) decided that the offer — $5.75 per share in cash, which amounts to about $2 billion from its more than $347 million shares outstanding — is inadequate and “undervalues the company’s franchise and growth aspects,” according to a press release today.

The Waltham company first received the offer from Elliot Associates on Mar. 3 , in a letter to the board noting that the acquisition offer constitutes a 49 percent premium over its current value. Elliot owns about 8.5 percent of Novell common stock to date.

The board noted that it will explore its options for the company and its stockholders, though its best option may not result in a transaction.

J.P. Morgan is serving as Novell’s financial advisor, with legal counsel coming from Skadden, Arps, Slate, Meagher & Flom LLP.

Novell’s 2009 annual report saw Novell’s network software business drop in its fiscal 2009, while its open source-based product line continued to make up a larger part of the company’s revenue.

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