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."

Comments

Re:I'm not surprised

[phantomfive]

Enterprise services are big business, IBM make $13 billion profit every year selling crappy software that does what people need.

Novell has a huge asset (besides their pile of cash), and that is their customer base. If they can create an attractive way for their customers to move forward, they have strong potential for profitability in the future. All they need to do is figure out what their customers need, stick it in a pretty package, and the sales will basically take care of themselves.

My understanding (from talking to employees at the company) is that Novell is a very bureaucratic company, and it is hard for new ideas to get backing inside the company. If they want to succeed they will need to overcome their inertia and become more nimble. There is no reason they can't do this: if they die, it will be because they got caught in their own tarpit and didn't have the will to change.

Re:Somewhere...

[tehdaemon]

So that's what the 2 billion offer was for. The good credit rating. Use it to borrow several billion, Pay yourself the borrowed money in consulting fees, and sell the now inches from bankruptcy company to clueless shareholders in an IPO.

Easy money.

T