Foundering software company Novell may be poised for a takeover by Elliot Associates, a hedge fund that already owns 8.5 percent of the company’s shares.
The Wall Street Journal reported this week that Elliot Associates had written a letter to Novell’s board of directors, saying that the company’s stock had "meaningfully underperformed all relevant indices and peers" and offering to buy up outstanding Novell shares – a move that would make the software company a private entity once again.
Reuters said that the $2 billion bid offered by Elliot could prompt rivals to step in with competing bids, citing Hewlett-Packard, IBM, and SAP as possible candidates to trump the hedge fund’s ambition. The news agency also said that Microsoft could potentially bid for Novell, but that such a merger would be unlikely to pass muster with antitrust regulators.
Novell’s software business has crumbled since the days that it went head-to-head with Microsoft in the productivity applications marketplace, and has lost out in other areas to SAP data management products, to name just one.
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