Hedge firm offers $1bn for Novell

Novell has been offered $5.75 per share in cash

A hedge fund which is one of Novell's largest shareholders has offered to buy the struggling software vendor for around $1bn (£665m).

Elliot Associates and related firm Elliot International said in a letter to the Novell board yesterday that they collectively own 8.5 per cent of Novell common stock.

The companies made an acquisition offer of $5.75 (£3.82) per share, which they said represents a premium of 49 per cent over the company's current enterprise value.

"Novell is a long-established company that we have followed closely for a considerable period of time," the letter continued.

"Over the past several years, the company has attempted to diversify away from its legacy division with a series of acquisitions and changes in strategic focus that have largely been unsuccessful.

"As a result, we believe the company's stock has meaningfully underperformed all relevant indices and peers. We believe that Elliott is uniquely situated to deliver maximum value to the company's stockholders on an expedited basis."

Novell confirmed in a brief statement that it had received an "unsolicited, conditional proposal from Elliott Associates" to acquire the firm for $5.75 per share in cash.

"Novell anticipates that its board of directors will review Elliott's proposal in consultation with its financial and legal advisors," the statement continued.