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Novell Reportedly Taking Bids From Up To 20 Companies
Degrees writes "Although Novell rejected the bid from Elliott Associates earlier this year, reports now indicate Novell has decided to embrace the inevitable. According to the Wall Street Journal (sub. required): 'As many as 20 companies have expressed interest in Novell, according to people familiar with the matter. Most, if not all, of the companies expected to lodge serious bids are private equity firms. ... Novell has four separate businesses, each of which could be attractive to a rival technology company. However, it's unlikely that a tech company would bid for all of Novell, these people said. Private equity firms, however, could break up Novell and either sell off the pieces or run them as standalone businesses.' Are there any companies that don't have an enterprise grade Linux distribution, and ought to? Ditto workstation management, directory services, legacy email, and virtualization suite?"
Then i WOULD be nervous. If Novell accepts bid from private equity firm, then we can say goodbye to them. Typical scenario in company takeover by private equity firms is extracting whatever capital company has by any means. In such scenario you can safely assume that Novell will be stripped out of things having some value (that can be easily sold), saddled with huge debt and private equity fund will extract all this capital via some form of (huge) dividend. Remaining carcass is typically sold to some fool investor who then sees it bankrupting. While I don't like Novell too much (after that Microsoft debacle), I'm also worried. I suppose that some of their patents will be sold to whoever offers better price. If it will be some patent troll , then we may see problems ahead. Private equity fund (a.k.a financial vulture) managers won't give a crap about it.