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Novell Rejects "Inadequate" $2B Takeover Bid
alphadogg writes "Novell's CEO wrote to customers Saturday telling them that the software company has rejected a $2 billion bid by hedge fund Elliott Associates to take it private. He called the offer 'inadequate' and said Novell will review alternatives. Novell has struggled financially even as it has reinvented itself from its NetWare network operating roots into an open source (SUSE and Ximian) and management and security software company. Revenue fell 10% during its most recent fiscal year (wrapped up in October) and its net losses widened. CEO Hovsepian's total compensation fell 17% to $5.7 million."
These days most private equity firms are basically vultures - I offer case in point, Chrysler Corporation. They buy out a firm, gut it, wreck it, and then try and unload a few pieces. Rarely does a private equity firm actually ever improve that which it buys.
This is my sig.
No, liabilities will be paid with by the company's cash, which theoretically will be replaced by next year's operating revenue. However, If Novell were to stop all operations today, it would have to pay the liabilities it already owes (wages, rent, utilities, invoices, etc.) with it's own cash, BEFORE any money would be paid to shareholders. The same is true if they had any debt. Any liabilities listed are for services or products (employee wages, office supplies) that Novell has already received but not paid for.
Correct that liabilities are different from debt, but you still "owe" either one. My point was that saying "one billion cash with no debt" is misleading. If you're talking about cash the company has in terms of its financial health, you have to mention its liabilities as well.
I'm not sure whether or not you meant that shareholder's equity is a liability, but the two are completely different. You don't pay back shareholder's equity, but you DO have to pay back liabilities.