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Novell Rejects "Inadequate" $2B Takeover Bid 111

alphadogg writes "Novell's CEO wrote to customers Saturday telling them that the software company has rejected a $2 billion bid by hedge fund Elliott Associates to take it private. He called the offer 'inadequate' and said Novell will review alternatives. Novell has struggled financially even as it has reinvented itself from its NetWare network operating roots into an open source (SUSE and Ximian) and management and security software company. Revenue fell 10% during its most recent fiscal year (wrapped up in October) and its net losses widened. CEO Hovsepian's total compensation fell 17% to $5.7 million."
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Novell Rejects "Inadequate" $2B Takeover Bid

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  • Somewhere... (Score:0, Interesting)

    by Anonymous Coward on Saturday March 20, 2010 @11:15PM (#31554780)

    Holy crap! they offered 2 billion to buy us out? We're not even worth half that!

    I know right! They must be insane....... I bet we can get 5 billion!

  • by Zombie Ryushu ( 803103 ) on Saturday March 20, 2010 @11:24PM (#31554830)

    Why did Novell not Linux-ify older Netwares? That is to say, make it so that Netware 3.x, and 4.x era IPX and NCP architectures could run on Linux (Think Netware-esque Samba). Back in the day, I could run a program called Mars_new on Linux, and it would permit me to utilize Dos workstations running Netware's Client software. Novell should have done this, make Netware a Linux application, have it go viral to all these orginizations that used Netware.

  • by billstewart ( 78916 ) on Saturday March 20, 2010 @11:35PM (#31554854) Journal

    There are companies that really should resist being taken over at low-ball prices. I'm very skeptical about any assertion that Novell is one of them; I'd suspect this is a seriously high-ball price, and yes I mean that in several different senses :-)

    That doesn't mean it's easy to work at a company that's been bought for too high a price - I used to work for Company N, which was bought by Company A for (IMHO) about 3x what they should have paid, and 2.5x what Company A could have gotten if they'd started out with a low enough offer and ignore Company N's CEO ranting about hostile takeovers. It was a great deal for the stockholders of Company N, but for the company itself, paying 3x what the company was worth meant that the buyers were expecting to get 3x as much revenue from owning Company N as was realistically available. So they went into radical cost-cutting mode, sold off a couple of divisions, tried a bunch of new things using the skills they imagined that Company N would have if a few people from Company A came over to "help", and when that failed, laid off a bunch of people (including me, but I found another job at Company A about when my severance pay ran out, so basically I got a vacation that was long enough I should have goofed off much more seriously than I did.) Eventually they stopped doing most of the things they were bad at (including some of their main product lines that were being eclipsed by the technology boom), went back to doing the things they actually were good at, and got spun off for a stock price that was about what they were actually worth at the beginning of this whole charade.

  • by khasim ( 1285 ) <> on Saturday March 20, 2010 @11:56PM (#31554964)

    Hovsepian is pulling in $5.7 MILLION a year for what?

    Why isn't he porting Netware and their other products to GENERIC Linux? Why do they want to tie everything to SuSE?

    Because they're idiots who are milking Novell for what they can get out of it while it slides into obscurity.

  • by Anonymous Coward on Saturday March 20, 2010 @11:59PM (#31554982)

    And how about their filesystem where if the file wasn't overwritten yet, you could simply undelete it, even as a user, including only seeing your own files for undeleting. I know it's possible to do something almost similar with snapshotting, but the default linux filesystems don't support that, and with the filesystems that do the functionality is still not the same (automatic removal of oldest files from snapshots as the disk fills up?), and it's not as easy to setup and use, and it's not integrated with the network filesystem and security as it was on Netware...

  • I'm not surprised (Score:3, Interesting)

    by ClosedSource ( 238333 ) on Sunday March 21, 2010 @12:11AM (#31555020)

    How many companies can survive on selling a commodity that people can acquire for free? If Linux were to become commonplace even Red Hat might have trouble getting customers to cough up for support they don't really need anymore.

  • Re:I'm not surprised (Score:5, Interesting)

    by phantomfive ( 622387 ) on Sunday March 21, 2010 @01:00AM (#31555216) Journal
    Enterprise services are big business, IBM make $13 billion profit every year selling crappy software that does what people need.

    Novell has a huge asset (besides their pile of cash), and that is their customer base. If they can create an attractive way for their customers to move forward, they have strong potential for profitability in the future. All they need to do is figure out what their customers need, stick it in a pretty package, and the sales will basically take care of themselves.

    My understanding (from talking to employees at the company) is that Novell is a very bureaucratic company, and it is hard for new ideas to get backing inside the company. If they want to succeed they will need to overcome their inertia and become more nimble. There is no reason they can't do this: if they die, it will be because they got caught in their own tarpit and didn't have the will to change.
  • by ishobo ( 160209 ) on Sunday March 21, 2010 @01:38AM (#31555368)

    Chrysler was saved by CCM. Daimler was the one that wanted to break apart the company and sell the peices. CCM was serious about reinvigoratinig Chrysler, that is why the lured Jim Press away from Toyota. Chrysler's problem was its recovery coincided with the worldwide recession. At that point, CCM had nowhere to go.

  • Re:Somewhere... (Score:5, Interesting)

    by tehdaemon ( 753808 ) on Sunday March 21, 2010 @01:45AM (#31555402)
    So that's what the 2 billion offer was for. The good credit rating. Use it to borrow several billion, Pay yourself the borrowed money in consulting fees, and sell the now inches from bankruptcy company to clueless shareholders in an IPO.

    Easy money.


  • Re:I'm not surprised (Score:2, Interesting)

    by OrangeCatholic ( 1495411 ) on Sunday March 21, 2010 @02:33AM (#31555570)

    >history shows service industries to be the poor cusions of people with something to sell.

    MS probably could not be as big as they are with support contracts. But they have licenses, which is like a support contract where they don't have to do any work.

    MS and Oracle are all about IP. Just like support wouldn't work for MS, I doubt selling and licensing IP would work for most smaller software companies. There just isn't the need. Once you decide not to license from the big boys, everything else is cheaper and better.

    I mean, have you ever heard of a startup company saying "I'm going to make an even *better* database than oracle and I'm going to charge MORE for it?" That's what would happen in any other industry besides software.

  • Re:Somewhere... (Score:1, Interesting)

    by shinehead ( 603005 ) on Sunday March 21, 2010 @02:38AM (#31555598)
    Novell...I didn't know they were still around. When someones says "Novell" I think of Lantastic, Banyan Vines, 100VGAnyLan, etc. NT4.0 ate their lunch and had freaky buttsex with their mom. My first NOS was a pirated copy of 3.11 (20 floppies) running on a 12MB 386DX 33 with a 90MB hard disk. Someone gave me two Arcnet cards (ARCNET!) and I was all set. The first time I saw that F: drive in Windows 3.11 I got so stoked I lived and breathed Netware and was CNA the next month and CNE about six months later. I was having a great time and these were the days when knowing a few DOS commands would get you a gig as sysadmin. I expect another graying veteran will point out that 3.11 needed (officially) 16MB to load. I spent hours tweaking the thing to get it going in 12MB. Now get off my lawn!
  • Back when Novell bought SUSE they wore lining up to be the most important company of all. They had a core service, eDir, that let them connect Linux, Windows and Mac computers together and collaborate in a coherent way. They could be the spider in the net, connecting it all in the background. Microsoft would never even touch that market with a ten foot pole so they wouldn't compete directly with MS.

    Then came a series of very bad decisions like only (barely) support their own Linux version. kind of made their core service suck since you couldnt use it with any other Linux distribution than SUSE. They made a strange decision to use mono for their services. Things that was pretty reliable, like Zenworks completely blows with mono. Zenworks 10 is something your lucky if you get working, if you get a function realiable, go buy a lottery ticket. They made DSFW, domain services for Windows. A hard complicated and cumbersome way of running an AD. Why on earth would i want to run AD even crazier than on Windows?

    The patent agreement with Microsoft was the real letter of resignation. They had the technology to capture a untapped market. The customers existed everywhere (what company today dont have Linux machines all over?) and they could help them with very little effort because their core services was ready to go and much of them already worked on Linux. It was just a matter of compiling and testing.

    My theory is that upper management knew this and still opted for a quick buck. They sold their shareholders out in the long run, killing the company in the process.

  • Re:Somewhere... (Score:1, Interesting)

    by Anonymous Coward on Sunday March 21, 2010 @08:53AM (#31556908)

    Netware is declining yes, but SLES/SLED/OpenSuse is still one of the top distros in download numbers. A quick peek at their financials will show you that they actually grew their linux sales by about $13million in the last year - not too bad in a crappy economy.

A committee takes root and grows, it flowers, wilts and dies, scattering the seed from which other committees will bloom. -- Parkinson