Novell

(NOVL)

shot up Tuesday after saying

IBM

(IBM) - Get Report

will make a $50 million investment in it via the purchase of convertible bonds.

The company also plans to buy software company Suse Linux for $210 million, building on the open-source portfolio it began with the acquisition of server and desktop software provider Ximian in August.

Novell said it and IBM are negotiating extensions to the current agreements for the continued support of Suse Linux on IBM's eServer and middleware products to provide for marketing support arrangements. The agreements should be effective when the acquisition of Suse Linux by Novell is completed, expected in January 2004.

Novell was recently up $1.78, or 29%, to $7.83.