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05.26.10

Novell Spin-off — Not Just Novell — is Up for Sale (Key Day Today)

Posted in Finance, Novell, SLES/SLED at 3:50 pm by Dr. Roy Schestowitz

Novell happy year

Summary: Novell’s days may be numbered but a spin-off of Novell too faces a similar destiny

WHETHER Novell will sell itself in pieces or as a whole unit we do not know yet. What we do know is that Novell has plans to make a sale and the following new article describes SUSE Linux users as “nervous”. They did not boycott Novell and now they are suffering inside.

Novell reportedly put itself on the market last week, leaving SUSE Linux Enterprise users unsure about the fate of that open source operating system and other Novell products.

If the report in The Wall Street Journal is true, the bidding kicks off two months after Waltham, Mass-based Novell’s board turned down Elliott Partners $2 billion buyout offer. At that time, Novell said the price was inadequate, and it would explore other options, including stock buy-backs, cash dividends and more alliances.

A Novell spokesman provided no comment.

In the mean time, Novell last week released SUSE Linux Enterprise 11 Service Pack 1.

Over at Server Watch, Paul Rubens says that Novell “has run out of ideas.”

Novell is a company that has run out of ideas.

That’s not to say it doesn’t have some good software, or that there aren’t some very good people working there. But the fact is that despite having SUSE Linux Enterprise Server (SLES) and much else to offer, Novell is a company going nowhere fast. Ask yourself this — which of these two companies does it most resemble: Red Hat, the vigorous, thrusting fellow Linux server operating system vendor, or the crumbling Sun Microsystems, just before Oracle acquired it?

That may be a loaded question, but you know the answer, and it sure as heck isn’t Red Hat. There’s a smell of death about Novell these days, along with a sense that this is a company that will never again attain the heights it reached in the past with NetWare. Like Sun before the Oracle acquisition, it’s in terminal decline. You know it, I know it, and, it seems, the company’s management know it too.

Last week we wrote about LANDesk, a Novell spin-off which is also putting itself up for sale. Another article on the subject has just been published.

Utah-based LANDesk up for sale

[...]

The year was 1991. Intel Corp. acquired a spin-off from Provo-based Novell Inc. and named it LANDesk.

From Channel Insider we learn that:

Even Novell has put itself up for sale. And Brocade reportedly investigated the market for its own sale last year. Here’s what’s behind the trend.

Novell will report its latest results any moment and it is expected to beat expectations (it does not mean anything if expectations are deliberately set low).

Here is another new take from a financial news site:

Novell has floundered for years, and many consider it a directionless company. Still, it has long been thought of by many as a buyout candidate for well over a decade. The reasons are many, and a higher price is only more than obvious as to what is needed for a real buyout of Novell.

Motley Fool says:

Novell, the former networking software star, now finds itself on the auction block. It rebuffed an unsolicited buyout offer from a hedge fund two months ago. Now it’s simply opening up the bidding process. The Wall Street Journal is reporting that as many as 20 different bidders may be fielding offers. This could get interesting, and next week’s report may set the tone on how desperate Novell is to cash out.

There are up to twenty companies/hedge funds waiting in line, as reported last week.

Novell has put itself up for sale, several news outlets report. The Wall Street Journal reported that the Waltham, Massachusetts based company can count on up to 20 bidders, most of them private equity firms. An unsolicited takeover bid by Elliot Associates to buy Novell for $5.75 per share in cash was turned down in March 2010.

Money Control reports:

Hewlett-Packard Co is in the process of buying smartphone pioneer Palm Inc for USD 1.2 billion, while software maker Novell Inc has put itself up for sale.

From DZone we get more or less the same story (no new information).

Novell on the Auction Block

After a hedge fund organization was turned down for offering too little, Novell is now taking bids from up to 20 companies for its acquisition. There’s no indication whether Novell’s four business units (including Linux technology and identity management) will be sold separately. The sale of Novell is expected to be in access of the previously offered $2 billion price tag.

A friend of Novell, the VAR Guy, remains cautiously optimistic.

The big question: Will those partners — and other solutions providers — take a broader look at Novell’s entire product portfolio, as part of the IWM push? And of course, the biggest question of all: Is somebody ready to step in and acquire Novell?

Another new one from the VAR Guy:

Novell vs. Mandriva: Don’t Confuse 2 Potential Linux Sales

Novell, promoter of SUSE Linux, is listening to potential takeover bids. Mandriva, promoter of a Linux distribution that has 3 million users, is in discussions with potential investors. As a result, some pundits think Mandriva Linux and Novell SUSE Linux face similar business challenges. The VAR Guy begs to differ.

The coming days will matter and the coming week/month will be a crucial one for Novell, which will probably announce that units of the company or the company as a whole is being sold.

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A Single Comment

  1. stan_qaz said,

    May 26, 2010 at 5:30 pm

    Gravatar

    There are a lot of us who were avid Suse users long before Novell came along and made such a mess. I have stuck around this long hoping for a time like now where Suse may get free of the control of Novell and back to being something I could support.

    I know it is difficult to remember but Suse has a long history and was primarily a KDE distro before the takeover, the Novell “reinvention” and the pressure to fit Gnome and all its mono baggage into the mix makes it hard. Please keep a spark of hope alive that something can be rescued be it all of the new OpenSuse with a new home or just a fork of the existing code that users are willing to support.

    Of course I don’t recommend Suse to a lot of people and I never purchase anything from them which would help support Novell and make Suse more attractive for them to keep.

    When I have to buy something I head for Red Hat, someone that won’t hand over my money to Microsoft.

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