On Sunday, Software company Novell announced their rejection of hedge fund Elliott Associates’ unsolicited takeover proposal. According to the company’s press release, the hedge fund, “which owns about a 8.5 per cent stake in Novell, announced its $2 billion offer earlier this month, pitched at about a 21 per cent premium to where the shares were then trading.” Deeming the rate of $5.75 a share “inadequate,” Novell rejected the proposal.
Instead, the company noted, the board “authorized a review of alternatives for realizing value for its shareholders, including share buy-backs, dividend payments, a joint venture or alliance, or the sale of the company.” Blue Harbour Group, 4% owner of Novell, supported the company’s move and “agreed that Novell’s value exceeded the proposal from Elliott.”
Elliott Management Corporation is a hedge fund manager founded by Paul Singer in 1977. The firm manages the Elliott Associates and Elliott International funds and frequently uses a shareholder activist investment strategy. |
