● 08.21.10

●● Novell Possibly Pursued by Vulture Funds Including John Paulson

Posted in Finance, Novell at 12:53 pm by Dr. Roy Schestowitz

Summary: John Paulson’s stake in Novell increases one week before its disappointing financial results officially arrive

BACK in May we wrote about John Paulson’s Paulson & Co putting his chip on Novell. Paulson is not a real businessman, he’s in the hedge fund meta-industry, so it’s reasonable to suspect that he too is among those 3 possibilities circling Novell with a takeover in sight [1, 2]. The 451 Group says that “there are only three left at the table: a private equity-backed company, a UK-based PE firm and a joint bid between a publicly traded tech company and a buyout shop.”

According to two items of news, Paulson is throwing some more of his chips into Novell’s table.

John Paulson added to his holdings in Novell Inc. by 20%. His purchase prices were between $5.25 and $6.26, with an estimated average price of $5.87. The impact to his portfolio due to this purchase was 0.13%. His holdings were 30,000,000 shares as of 06/30/2010.

Timing matters a lot in this case. Novell’s results will be out soon [1, 2] and optimistic reports like this one or that one are baseless given the recent warning from Novell. “Novell Set to Pullback after Yesterday’s Rally of 2.11%,” says another short report. Given that Novell has already warned about poor performance, investors are unlikely to be shocked next week. However, if Novell announced an impending sale of the company, that would really be something. Paulson seems like a possible candidate. █

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