Updated with premarket prices

WALTHAM, Mass. ( TheStreet) -- Novell ( NOVL) said its board will review a buyout offer valued at about $2 billion from private-equity firm Elliott Associates.

In a statement, Novell acknowledged receipt of the unsolicited proposal from Elliott for $5.75 a share in cash. Novell shares closed Tuesday at $4.75, but soared 25.9%, or $1.23, to $5.98 in after-hours trading. The Elliott offer was disclosed just after the market closed Tuesday.

In premarket trades Wednesday, the stock rose to $6.11.

Elliott already owns about 8.5% of enterprise software maker Novell, meaning its offer is for the remainder.

Elliott portfolio manager Jesse Cohn, in a letter to Novell's board, said the private-equity firm's offer implies an enterprise value, net cash, of $1 billion. Elliott said its offer price represents a premium of 49% over Novell's current enterprise value and 77% over Novell's 90-day volume-weighted average enterprise value.

"By any measure, we believe our proposal represents a compelling opportunity that your stockholders will find extremely attractive," the letter said.

Elliott began buying Novell shares around Jan. 4. It said its offer is a premium of 115% over Novell's enterprise value on that date.

-- Reported by Joseph Woelfel in New York.

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