Novell Acquisition Deal Hits a SnagBy Reuters | Print
The deal to sell Novell in parts to a few different buyers has hit a snag, reports say, after private equity buyers balked at the price for Novell's Netware and Identity Management businesses.
NEW YORK, Sept 23 (Reuters) - Shares of software maker Novell Inc (NASDAQ:NOVL) fell 6 percent in early Thursday trade after news that the company's auction process was facing setbacks.
"There's some chatter that Novell is having problems closing the deal," said James Gilman, a Capstone Investments analyst.
Reuters reported on Wednesday that Novell was having trouble selling its NetWare and identity management products, with private equity firms unwilling to pay the company's asking price.
Los Angeles-based Platinum Equity, founded by Tom Gores, had been among the private equity firms participating in the auction, has dropped out, a source told Reuters.
Buyers are more interested in Novell's Linux business than some of its other assets, another source said.
"It's not easy to carve up one particular unit from the company as a whole and the discussion can reach an impasse," Gilman said.
Novell shares fell 39 cents to $6.12 on Nasdaq. (Reporting by Liana B. Baker, editing by Dave Zimmerman)