Private equity firm Elliott Associates LP on Tuesday offered to buy the 91.5 percent of the shares it doesn't already own in enterprise software company Novell Inc. for $5.75 each, an offer valuing the company at about $2 billion.
Shares jumped $1.35, or 28 percent, to $6.12 in after-hours trading, suggesting that investors believe a higher bid could emerge. Over the past 52 weeks, shares have traded between $2.97 and $5.05; they haven't traded above $5.75 since September 2008.
The offer represented a 20 percent premium to Novell's closing stock price of $4.80 on Monday. There are about 347 million shares outstanding.
In a letter to Novell's board, Elliott portfolio manager Jesse Cohn said the offer, net of about $1 billion in cash in the company, implies a $1 billion enterprise value, a 49 percent premium to the company's current enterprise value.
Novell's cash balance represents almost 60 percent of the company's market capitalization, but much of it is overseas "and may not be realized in a tax efficient manner," Cohn wrote.
Elliott began acquiring Novell stock on Jan. 4 and controls about 8.5 percent of the company.
Pointing to its own track record of helping its acquired companies, Cohn said Elliott is "uniquely situated to deliver maximum value to the company's stockholders on an expedited basis" and faulted a recent series of acquisitions and changes in strategic focus at Novell.
A Novell representative said the Waltham, Mass., company had no immediate comment.
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