Is Novell about to be broken up and sold?

David Heath
Thursday, 16 September 2010 11:41

IT Industry - Listed Tech

Rumours are abounding that following a rejected buyout offer in March, Novell is about to be broken into two parts and sold separately.

Many news services are reporting that Novell is close to sealing a deal that will see the company sell off it's Linux business units to a "strategic buyer" and deliver the remainder of the company to a private equity firm.

Following the rejection of an offer from private equity firm Elliot Associates in March priced at $5.75 per share, the company's stock has hovered around that level ever since.

With the news of the rumour breaking over night, the stock price immediately rose to $5.90 with peaks as high as $6.00 in after-market trading.

This announcement comes as something of a slap-in-the-face to departed Vice Chairman, Office of the CEO Chris Stone, now President and CEO of SiCortex, who in 2003 was instrumental in acquiring SuSE Linux and Ximian making Novell one of the largest supporters and providers of Open Source Software.  It was this move which gave Novell a new lease on life following it's floundering in the network business.

The reported sources indicate that the sale is still some weeks away, but that both parts of the deal will be executed simultaneously.