Novell CEO Eric Schmidt has claimed the ailing networking company is not up for sale in an attempt to distance Novell from growing speculation that IBM was about to mount a takeover bid.
Last week, industry sources alleged that IBM was discussing a merger with Novell and that an announcement would be made this week.
But Schmidt insisted that ?the company is not for sale? when he spoke at the Java Internet Business Expo in New York last week. He added he could not legally comment on acquisitions.
In his address, Schmidt also said Java and network services would form the basis of Novell?s future product direction. He said Novell would move from the client/server model of the 1980s to a client services model, with Java as the basis for the entire architecture.
However, the speculation of an IBM merger pushed Novell?s share price up by 16 per cent last week.
Kevin Manion, sales director at No-vell UK, remained tight-lipped about the possibility of a merger, reiterating Schmidt?s statement that the company was not up for sale.
Commenting on the surge in share price, Manion said: ?I think this is because we spelled out what we wanted to fix and we have fixed it.?
Two weeks ago, the ailing network firm made a loss of $122 million in its third quarter, ended 31 July, with sales dropping 75 per cent to $90 million, compared with $365 million last year.
But Manion said Novell expected a drop in profits following a huge restructuring programme, which saw 15 per cent of EMEA staff axed earlier this year (PC Dealer, 21 May ).
Manion said: ?We knew there would be a loss and wanted to get it over with in one quarter. We are now finding margins have come back for the reseller.?
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