Investment Firm Bids to Buy SCOs UNIX Operations

WebCowboy writes "It appears that there are still enough people out there deluded enough to see value in SCOs UNIX operations. York Capital Management has put in a $36 million bid for SCOs UNIX operations. The offer includes coverage of up to $10 million for payment of legal fees and York Capital would assume ownership of the disputed UNIX IP as well as what is left of the lawsuits. Interestingly, SCO has offered this up for competitive bid (who would want to though?). Upon completion of the transaction, should bankruptcy court approve, SCOX would become solely a mobile applications provider (which is the only part of SCOs offerings that have undergone any meaningful development for quite some time)."

Comments

Re:Does this not screw Novell?

[mce]

Actually, at least based on the limited info I have seen, from a purely financial point of view Novell should be happy. SCO does not have the money that it owes Novell, but YCM does. So, actually, I wouldn't be surprised to find out later that Novell helped to set it all up.

Please note that the deal will cost YCM more than $36m, so their valuation of the thing they'd be acquiring must be considerably higher as well.

• If they behave sensibly, they will stop the lawsuits and pay Novell (that is: on top of the $36m). Next they will need to spend some money to clean up the mess and carve up the pieces. Only after that has been resolved, can they think of selling the viable bits and making a profit.

• If they do not behave sensibly, they will continue the lawsuits and loose more money in the process (e.g. on legal fees). Even if they think they still have a chance of winning something along the way, they sure know very well that odds are against them and they will have taken that into account during their risk calculations while valueing SCO.

Companies such as YCM do not step into a very risky deal like this one without a clear view on a sizeable return on investment that would compensate for all the risk. I have a feeling that a few years from now the YCM-SCO example might become standard case study in business schools.