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California-based virtualization software company VMware Inc., a spinoff of Hopkinton’s EMC Corp., is reporting to be far along in talks to buy the Linux operating systems business of Waltham’s Novell Inc.
According to the Wall Street Journal, VMware is looking to buy the SUSE Linux assets from Novell (Nasdaq: NOVL), which bought Germany’s SUSE AG in 2003. Novell said it was seeking potential buyers after it rejected a $2 billion buyout bid from Elliot Associates LP, a company stockholder, in March. Novell 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.
Also in March, Novell won a legal dispute over whether it or The SCO Group of London owns the copyright to the UNIX operating system. The jury in the trial in the District Court of Utah found that Novell is the rightful holder of the copyright.
In the Wall Street Journal report, VMware and Novell are said to still have a difference over valuation of the assets, although the report cites insiders saying the deal is weeks away. The report did say that the deal could still not happen, if details can’t be hammered out.
In addition, the report said that the remainder of the company, including it’s NetWare network operating system business, was being looked at by software company Attachmate Corp., which is backed by buyout investors Golden Gate Capital and Francisco Partners, among others.
No one from either Novell or EMC could be reached for comment immediately this morning.
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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