Novell Gives Nod to Attachmate's $2.2 Billion Offer
Vendor also plans to sell rights to 882 patents for $450 million to Microsoft-led CPTN Holdings.
Novell Inc., based in Waltham, MA, said that it has agreed to a $2.2 billion buyout offer from Attachmate Corp., a privately-held investment group headed by Francisco Partners, Golden Gate Capital and Thoma Bravo.
Attachmates $6.10 per share cash bid represents a 2 percent premium from the software vendors $5.96 closing stock price on Monday.
Novell also said that it will sell $450 in intellectual property to CPTN Holdings LLC., a consortium led by Microsoft Corp. While Novell did not disclose the specific patents involved, it revealed in a Securities and Exchange Commission (SEC) 8-K filing that it will sell rights to 882 patents.
The deal with Attachmate is conditioned based on the intellectual property sale, officials said. Novell said that both the Attachmate and CPTN transactions are subject to shareholder and regulatory approvals. The deals are expected to close in the first quarter 2011.
In March, Novell dismissed a $2 billion, or $5.75 per share buyout offer submitted by Elliott Associates L.P., an institutional holder of 8.5 percent of Novell's common stock. At the time, the vendor contended that Elliotts proposal did not adequately express the companys value. In rejecting the offer, however, Novell left the impression that it was open to other suitors.
"After a thorough review of a broad range of alternatives to enhance stockholder value, our Board of Directors concluded that the best available alternative was the combination of a merger with Attachmate Corporation and a sale of certain intellectual property assets to the consortium," said Ron Hovsepian, Novell president and chief executive.
Hovsepian said that the Attachmate and CPTN deals more accurately recognized Novells value and provided its shareholders with a higher return on investment, indirectly referencing the earlier Elliott offer.
Attachmate said that it will operate Novell and its SUSE Linux operating system as two separate business units, folding it in with its flagship Attachmate line and NetIQ, which it purchased in 2006.
"The addition of Novell to our Attachmate and NetIQ businesses will enhance the spectrum of solutions we can offer to customers, said Jeff Hawn, Attachmate chairman and chief executive.
Novell is advised financially by J.P. Morgan and legally by Skadden, Arps, Slate, Meagher & Flom LLP. Attachmate is advised financially by Credit Suisse and RBC Capital Markets and legally by Jones Day.
Business News Solutions
Solutions in a Small World (Latin America): Sealed with a Kiss
Even in today’s Internet-dominated world, in-person business connections still make strong impressions. But face-to-face marketers must be aware of cultural disconnects, explains AMD’s Gerald Youngblood.