Novell has agreed to be purchased by Attachmate for $2.2 billion in cash in a deal that will also see a group organized by Microsoft pick up intellectual property assets.
According to Novell, which announced the deal Monday morning, Attachmate plans to operate Novell as two business units -- Novell and SUSE. Attachmate will join the two units to its main Attachmate unit, which operates intelligent workload management services, and also to Attachmate's NetIQ unit, which provides IT system, security, and performance management for IT enterprise operations.
The deal, which Novell said is "definitive," trumps an earlier offer for Novell made in March by hedge fund Elliott Associates, which offered $5.75 a share for Novell. Attachmate is offering $6.10 a share. Novell's stock was trading at $5.95 a share in early Monday trading, indicating that investors are betting that a bidding contest for Novell will not develop.
Attachmate's $6.10-a-share offer represents an 8% premium over Novell's closing share price on March 2 just before Elliott Associates made its initial offer.
"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 (Microsoft) consortium," said Ron Hovsepian, president and CEO of Novell, in a statement.
Novell acquired open source provider SUSE in 2003. Open source software that stemmed from that acquisition includes SUSE Linux Enterprise Server, SUSE Linux Enterprise Desktop, and SUSE Moblin. In addition, Novell has operated a unit that markets open source software that was established in 2006 with Microsoft. Novell said Microsoft organized a consortium of technology companies called CPTN Holding that will purchase "certain intellectual property assets" for $450 million as a part of the $2.2 billion deal.
Hovsepian said he expects Attachmate will "deliver important benefits to Novell's customers, partners, and employees by providing opportunities for building on Novell's brand, innovation, and market leadership."
Novell said it expects the deal, which it describes as a merger, to close in the first quarter of 2011, pending approval from regulatory agencies. An investment group led by Francisco Partners, Golden Gate Capital, and Thoma Bravo owns Attachmate.