Elliott Associates Offers to Buy Novell

You are far to skeptical of these private equity firms. Yes what you said could happen but have you ever looked at Novell's product line and sales? They still spend enormous resources and effort producing and selling Netware (it even runs on top of SUSE), Groupwise and edirectory. I doubt they even make money on any of those products but they spend enormous resources on them. My Guess is Elliot sees SUSE as Novell's only long term profitable division and that they see an opportunity to come in a gut the Legacy products and spin them off as a separate company or sell them and clean Novell up. IMO the Legacy products have been holding Novell back, as another poster has mentioned they still generate revenue and they would get slaughtered on wall street if they came in and gutted the divisions because the long term value isn't there.

Personally I don't agree with your assertion (and others) that Elliot is only looking at short term value. With a shareholder buyout they will be taking the company private, they won't be interested in short term gains, they will be looking for long term value so they can either sell the company or take it public in 5 years or so. My guess is the transaction will result in a company that is far more like RedHat in it's focus on Opensource software and eliminate the wasted resources on products no one wants anymore.