NEW YORK, Nov 22 (Reuters) – Software provider Novell Inc (NASDAQ:NOVL) said it agreed to be bought by privately held Attachmate Corp for about $2.2 billion in a deal that also involves Novell selling some assets to a consortium led by Microsoft Corp. (NASDAQ:MSFT)
Novell shares were up 6.5 percent at $5.96 after the news on Monday but were still below the deal value of $6.10 per share.
The agreement follows Novell’s rejection in March of an unsolicited proposal from Elliott Associates to buy Novell for $5.75 per share. After it rejected that offer the Novell board ran an auction process that drew multiple rounds of bids that dragged out over several months.
"The board explored all alternatives … and found this to be the best value for our shareholders," including the option of remaining independent, Novell Chief Executive Ron Hovsepian told Reuters in a telephone interview.
Novell said the $2.2 billion deal value includes its concurrent sale of some intellectual property assets for $450 million to the Microsoft consortium known as CPTN Holdings.
Both deals are expected to close in the first quarter of next year. The Attachmate/ Novell deal needs approval from regulators and Novell shareholders. The IP sale is also subject to the closing of the Attachmate merger as well as regulatory approval, Novell said.
Novell said the $6.10 per share price represents a premium of 28 percent to its closing share price on March 2, just before the disclosure of the Elliott Associates offer.
Attachmate, a provider of technology services, is owned by an investment group led by Francisco Partners, Golden Gate Capital and Thoma Bravo.
Attachmate plans to operate Novell as two units, Novell and SUSE, along with its other holding NetIQ and expects the resulting company to have revenue of about $1 billion a year.
Jeff Hawn, the CEO of Attachmate, said his company expects to generate some savings as a result of the deal, including the potential for some job cuts, but he declined to give details.
JP Morgan was Novell’s financial adviser and Skadden Arps, Slate, Meagher & Flom was its legal adviser in the agreement. Attachmate used Credit Suisse and RBC Capital Markets as financial advisers and Jones Day as legal adviser. (Reporting by Sinead Carew and Nadia Damouni; editing by Derek Caney and Matthew Lewis)