SUSE To Flip Back Into Private Ownership (theregister.com) 17
Two years after being listed on the Frankfurt Stock Exchange, the Linux-for-enterprise company SUSE is switching back to private ownership. The Register reports: On Wednesday the developer announced that its majority shareholder, an entity called Marcel LUX III SARL, intends to take it private by delisting it from the Frankfurt Stock Exchange and merging it with an unlisted Luxembourg entity. Marcel is an entity controlled by EQT Private Equity, a Swedish investment firm, which acquired it from MicroFocus in 2018.
The announcement offers scant detail about the rationale for the delisting, other than a canned quote from SUSE CEO Dirk-Peter van Leeuwen who said, "I believe in the strategic opportunity of taking the company private -- it gives us the right setting to grow the business and deliver on our strategy with the new leadership team in place." Van Leeuwen took the big chair at SUSE just over three months back, on May 1. The deal values SUSE at 16 euros per share -- well below the 30-euro price of the 2021 float, but above the Thursday closing price of 9.605 euros.
Interestingly, Marcel is happy for shareholders not to take the money and run. "There is no obligation for shareholders to accept the Offer," explains the announcement's detail of the transaction's structure. "EQT Private Equity does not intend to pursue a squeeze-out. Therefore, shareholders who wish to stay invested in SUSE in a private setting may do so." Shareholders who stick around will therefore score their portion of a special dividend SUSE will pay out as part of this transaction. Those who sell will get the aforementioned 16-euros per share, less their portion of the interim dividend. The transaction to take SUSE private is expected to conclude in the final quarter of 2023.
The announcement offers scant detail about the rationale for the delisting, other than a canned quote from SUSE CEO Dirk-Peter van Leeuwen who said, "I believe in the strategic opportunity of taking the company private -- it gives us the right setting to grow the business and deliver on our strategy with the new leadership team in place." Van Leeuwen took the big chair at SUSE just over three months back, on May 1. The deal values SUSE at 16 euros per share -- well below the 30-euro price of the 2021 float, but above the Thursday closing price of 9.605 euros.
Interestingly, Marcel is happy for shareholders not to take the money and run. "There is no obligation for shareholders to accept the Offer," explains the announcement's detail of the transaction's structure. "EQT Private Equity does not intend to pursue a squeeze-out. Therefore, shareholders who wish to stay invested in SUSE in a private setting may do so." Shareholders who stick around will therefore score their portion of a special dividend SUSE will pay out as part of this transaction. Those who sell will get the aforementioned 16-euros per share, less their portion of the interim dividend. The transaction to take SUSE private is expected to conclude in the final quarter of 2023.
Flip (Score:1)
Then flop.
Unlikely to change anything (Score:2)
Re:Unlikely to change anything (Score:4, Insightful)
Suse where always bit a redheaded stepchild of a distro, never really getting the acolades of the Redhat and Ubuntu giants (and Debian who despite being resolutely dedicated to being a non-commercial organic affair pack a hell of an industry clout)
But if we're honest , Suse where always respectworthy. Their OS versions and payware versions are largely feature identical, they've put a lot back in , and they've never seemed quite the attention seekers the others have. Just quietly plodding along doing their thing. And as a half bil a year company, doing rather well for it.
Re:Unlikely to change anything (Score:5, Informative)
Largely stems from bad strategic choices back in the 90s.
Red Hat and SUSE largely catered to the same sensibility, but Red Hat was utterly freely available to acquire, and you'd find tech magazines with a RedHat CD included, companies would sell cheap CDs of distributions including RedHat, universities would have it handy to burn in computer labs.
SUSE, on the other hand, started more like RHEL today. You couldn't redistribute their media, you couldn't just download an image, YAST, at the time, was proprietary, closed source software. I first started interacting with it as part of work around 2003 or so, and for the RedHat work I could just download a copy without thinking, for SUSE I had to log into SUSE's site with our account and such.
RedHat pivoted to SUSE approach, and it made a huge dent in RedHat's popularity, but they had enough momentum to stay more relevant, in part thanks to CentOS promising a continuity for RedHat users. So if you were used to RedHat, you didn't have to go far and risk dealing with something unfamiliar. If RedHat had been like that from the onset, they would have shared an equally poor fate.
SUSE started down the path to sanity shortly after RedHat started down a bad path. You had openSUSE come out and be freely available, but between RedHat, CentOS, and Ubuntu being out and getting the benefit of people saying "nevermind about RedHat", there wasn't much room for OpenSUSE to get traction. Part of the problem was that 'OpenSUSE' was more like Fedora to SUSE's "Enterprise" offering.
SUSE started to get a bit more sane around 2015, when they made Leap, and Leap was close..ish to SLE 12. However, it still deviated a fair amount. Leap 15 corrected *much* of that ongoing discrepancy, and *finally*, with 15.3, they synced up nice and close with SLE 15.3. So they got there, and in a way that formally celebrates the free edition and compatibility, but it was a long tricky road.
I do feel like SUSE deserves to benefit from RH's strategy change. They are doing it right as of 2021, just as RH is going to double down on doing it wrong. There's a lot of momentum to overcome, and the biggest beneficiary of RH's missteps dating back to 2004 has been Ubuntu, so there's less share up for potential grabs.
Re: (Score:2)
Suse where always respectworthy.
Suse where always bit a redheaded stepchild
I think you meant "Suse ware always...".
As in 'I'm running Susiware'
As for biting stepchildren, that's another discussion...
Re: (Score:2)
Iphone typing and this archaic websites lack of an edit button are a curse, alas.
Re: (Score:2)
Now that SUSE is working with Rocky Linux and AlmaLinux to create a new open standard Enterprise Linux to replace Red Hat, I'm even more excited to see what they come up with in the near future.
Re: (Score:2)
Ah deja vu.
Back in 2002, frustrated with Red Hat's position in the market, SUSE, TurboLinux, Conectiva, and Caldera to make UnitedLinux.
Here we go again...
Re: (Score:2)
Hopefully things will go better this go-around without those clowns at SCO screwing it up.
Re: (Score:2)
Netcraft confirmed they already did.
Re: (Score:2)
Re: (Score:2)
Private Equity... (Score:3)
My worry is more that this is going the private equity route. At least in the US, when we see tech companies being purchased by private equity companies, there has been a trend that the firm bonds or mortgages out the IP that they bought, take the cash then dump the company with a ton of debt on their books. It's caused major failures and bankruptcies or pretty big companies in the recent past. I mean, just a few weeks back Instapot announced bankruptcy because of this same thing.
I'm hoping this isn't really the case, and time will tell. The partnership that is being formed between SuSE, Rocky, Alma, Oracle and others for enterprise Linux has me hopeful, but I need to see the results to be sure.
Risk Required (Score:2)
Cool, they have a unique opportunity to dethrone RHEL but the risks are big enough to spook shareholders.