DOJ Patent Investigation Mires Novell AcquisitionBy Channel Insider Staff | Posted 2011-03-14 Email Print
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The Department of Justice is taking longer than expected on the due diligence surrounding 822 patents that will be sold to a Microsoft-led consortium of vendors when Novell is sold to Attachmate.
Novell's $2.2 billion acquisition by Attachmate, approved by shareholders of both companies last month, has run into some legal snags.
The deal hinges largely on the sale of 882 patents to a Microsoft-led consortium of vendors. As might be expected, due diligence by the U.S. Department of Justice and the Securities and Exchange Commission in examining each of these patents is taking longer than expected.
As a result, the closing of the transaction has been pushed out from March to at least mid-April. Investors and shareholders in both companies won't be pleased to hear this news.
According to a Form 8-K legal affidavit filed by Novell on March 4 in response to a second request for information from the DOJ, Novell and the Microsoft consortium "have agreed to provide the DOJ with additional time to review the patent sale and not to close the patent sale prior to April 12, 2011. The Company remains committed to working with the DOJ as it conducts its review of the patent sale."
Novell, which has been struggling in red ink for the better part of the past 10 years in the Linux and enterprise middleware market, needs this deal—with its infusion of badly needed capital—to be completed as soon as possible.
Stockholders of networking and middleware provider Novell voted at a special meeting Feb. 17 to accept the merger agreement made Nov. 21, 2010, with Attachmate Corp. and Longview Software Acquisition Corp.
Attachmate is spending $6.10 per share for Waltham, Mass.-based Novell.
For more, read the eWEEK article: Novell Acquisition Delayed by DOJ Patent Investigation.