Novell Rejects Elliott Associates Buyout

The press release and email to customers informed them that Novell had carefully considered the proposal from Elliott Associates, L.P. and came to the conclusion that it greatly undervalued the growth and franchising potential of the company. For this reason the company is looking for "alternatives" to the deal. As Hovsepian indicates in his email to customers:

"Today we issued a press release announcing that our Board of Directors has concluded, after careful consideration, including a review of the proposal with its independent financial and legal advisors, that Elliott's proposal is inadequate and that it undervalues the Company's franchise and growth prospects."

The "alternatives" the company is considering are to enhance stockholder value. These include return of capital through stock repurchase, strategic partnerships and joint ventures, even a recapitalization and sale of the company, according to the press release.

The announcement ends with an optimism that that Novell is "committed to enhancing value" for its stockholders and that theses alternatives are in its and their best interest. However, "Novell's Board noted that there can be no assurance that this will result in any agreement or transaction" and until the Board approves a specific course of action, Novell "does not intend to disclose developments" about any of the mentioned alternatives.