Attachmate Buys Novell For $2.2 Billion

WALTHAM, Mass. ( TheStreet) -- After months of speculation and rumor, the great Novell ( NOVL) selloff is finally happening, with business software specialist Attachmate grabbing most of IT in a $2.2 billion acquisition.

The deal, which is valued at $6.10 a share, is expected to close in the first quarter of 2011. Novell also announced that it has entered into an agreement to sell some of its intellectual property to CPTN Holdings, a consortium run by rival Microsoft ( MSFT), for $450 million in cash.

Novell, with also competes with Oracle ( ORCL), has been on the block since earlier this year, when hedge fund Elliott Associates made an unsolicited bid of $5.75 a share. Novell rejected the offer, which it described as undervaluing the company. The Novell board, however, said that it was exploring alternative strategies, including a return of capital to shareholders and selling the company.

"Our board of directors concluded that the best available alternative was the combination of a merger with Attachmate Corporation and a sale of certain intellectual property assets to the consortium," explained Novell CEO Ron Hovsepian, in a statement released on Monday. "We are pleased that these transactions appropriately recognize the value of Novell's relationships, technology and solutions, while providing our stockholders with an attractive cash premium for their investment."

The merger agreement with privately-held Attachmate caps months of speculation about Novell's future. The company's stock plummeted recently on worries that it was struggling to close a deal to sell its NetWare product, and the Wall Street Journal also reported that VMware ( VMW) was in advanced talks to buy Novell's SUSE Linux operating system.

When the transaction closes, Attachmate plans to operate the software maker as two business units: Novell and SUSE. Attachmate also plans to join these units with both itself and its NetIQ business, which focuses on systems and security management.

Novell shares climbed 35 cents, or 6.26%, to $5.94, shortly after market open, despite a modest dip in tech stocks that saw the Nasdaq slip 0.11%.

--Written by James Rogers in New York.

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