Novell may be sold off in two parts, newspaper reports

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Novell Inc., the Utah-founded company whose largest office is in Provo, is in talks to sell off the company in two pieces, The Wall Street Journal reported Friday.

Citing unnamed sources, the newspaper said VMware was pursuing Novell's SUSE Linux, the part of the company that sells software to run computer servers used by commercial and government operations. The Seattle software company Attachmate Corp. is in talks to buy "some or all of the remaining assets," including NetWare, which is the latest version of the software that runs computer networks and that catapulted Novell to prominence and profitability after it was founded in 1979 in Provo as Novell Data Systems.

Novell, whose headquarters moved to Waltham, Mass., in 2004., declined to comment on the Journal story. It is unclear what impact the sales might have on the company's offices in Provo, where 1,380 people are employed.

Novell's shares finished up 7 cents at $6.12 a share Friday on the Nasdaq stock exchange. The shares rose 6 percent Wednesday after the New York Post reported a deal was near.

Novell's board said six months ago that it would entertain offers after it rejected an unsolicited bid of $5.75 a share from the hedge fund Elliott Associates.

Novell reported $605 million in revenue and a profit of $56 million in the first nine months of its fiscal year. The company has about $1 billion in cash on hand.

As many as 20 companies initially expressed interest in Novell, the Journal reported, with a first round of bidding taking place in May. Novell recently asked potential buyers to submit bids for the whole company and for individual pieces, the newspaper said.

MKM Partners software analyst Aaron Schwartz estimated that an $8-a-share deal could be struck, valuing the company at $2.8 billion, Bloomberg News reported. That would be 36 percent above the stock's average price over the past 100 days.