Novell's board has considered and rejected an unsolicited $2 billion takeover bid from Elliott Associates, a hedge fund that wants to swallow SUSE Linux and Novell's other core products. Novell's rejection of the bid, announced March 20, answers some questions but raises others on the eve of BrainShare, the company's big customer and partner event in Salt Lake City, Utah. Now the twist: Novell's board essentially wrote an open letter to other potential suitors. Here's the analysis from The VAR Guy.

First, the back story (in case you missed it). Elliott Associates already owns a chunk of Novell stock, and the hedge fund earlier this month offered to buy the rest of Novell for about $1.8 billion. At the time, The VAR Guy predicted Novell would address the takeover offer before BrainShare started on March 21 -- in order to ensure the bid didn't become a major distraction at the conference.

So, kudos to Novell for providing an answer to Elliott Associates and investors on March 20. In a prepared statement, Novell said Elliott Associates' bid "to acquire the Company for $5.75 per share in cash is inadequate and that it undervalues the Company's franchise and growth prospects."

Novell: Up for Sale?

But now comes the interesting part. Novell also announced that its Board of Directors has:
"authorized a thorough review of various alternatives to enhance stockholder value. These alternatives include, but are not limited to, a return of capital to stockholders through a stock repurchase or cash dividend, strategic partnerships and alliances, joint ventures, a recapitalization and a sale of the Company."
Translation: Novell is willing to listen to more takeover bids. But is that really news? Shouldn't Novell's board always be looking for alternatives to enhance stockholder value?

Also, Novell's rejection of the Elliott Associates' bid mentions "Novell's growth prospects." Hmmm... Is Novell really a growth company? Top-line financial results suggest no. But individual product groups -- particularly SUSE Linux -- suggest yes.

More Chatter At BrainShare

The VAR Guy will continue covering this story when he lands in Salt Lake City later tonight, and starts covering BrainShare the rest of this week.

Sign up for The VAR Guy’s Newsletter; Webcasts and Resource Center; and via RSS; Facebook; Identi.ca; Twitter and VARtweet.