Novell Seeks Substitutes After Casting Off Elliott’s Acquisition Bid
Novell Inc. on Saturday discarded a bid by hedge fund Elliott Associates LP aimed at buying the company for about $1.8 billion, on Monday. It explained that the deal would have turned down the company's value in the international economy, thereby hindering its growth.
However, the software company set itself on sale seeking a boost in the shareholder value.
Despite the harsh move taken up by Novell, Elliott has emerged confidently, saying that it still looks forward to an acquisition with its proposal amount of $5.75-a-share.
"The board's decision to conduct a sale of the company, which we believe is the best way to maximize shareholder value", quoted Elliott.
On Friday, Novell's shares were reported to have gained by 4.6% in premarket trading closing at $5.64.
Elliott, being the third-largest shareholder of Novell, has an 8.5% stake in the company. There are speculations over Elliott raising the bid amount further.
Following the rejection of Elliott's bid; Novell's board has looking for other options, including a share buyback, cash dividend, joint undertaking, recapitalization, mergers or an entire sale.
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